This plan is sometimes referred to as an income-based or wage-earner's plan.
Chapter 13 Bankruptcy Evaluation gives the debtor the option of proposing a plan of repayment which will either extend or reduce the amount of any obligations and give him the chance to be discharged from any unsecured debts upon his completion of any and all payments.
Individuals filling for bankruptcy under Chapter 13 Bankruptcy Evaluation (BE) want the opportunity to repay the debts in their name, with better terms than they currently receive.
These terms can include lower, even no interest.
Unlike the more famous Chapter 7 which requires the selling of all assets, this process permits the debtor to use future income to pay creditors.
The main requirement for someone to be able to file Chapter 13 BE is that the person must have a steady income.
The US Bankruptcy Code allows the debtor a maximum of 5 years in which to pay his creditors.
The whole process is carried out under the watchful eye of the courts.
Listed below are the necessary steps for filing for Chapter 13 Bankruptcy Evaluation: - Make sure Chapter 13 is the best solution.
- Create a budget.
- Look into similar cases and deduce whether or not the filing of Chapter 13 Bankruptcy Evaluation can be handled in another way.
- Decide on methods of dealing with creditors.
- Draft a Chapter 13 Bankruptcy Evaluation plan, and complete all forms.
- Pay the filing fee.
- Go to all meetings you may be forced to attend: with creditors, the court, lawyers, etc.
- Receive a discharge once you have completed all payments.