As opposed to the liquidation of assets that you will find within a Chapter 7 bankruptcy process, the Chapter 13 bankruptcy filing and process is based upon more of an adjustment or reorganization of the debts of a debtor. There are specific limitations of the amounts of unsecured debts, as well as the fcat that the debtor in question earns a regular income.
The Chapter 13 bankruptcy option is actually quite different from that of the Chapter 7 option, and does not really provide the so called complete debt relief as per the latter. Chapter 13 bankruptcy is largely considered to be an ‘elective’ option due to the fact that in the event that a creditor or creditors force someone into bankruptcy, known as involuntary bankruptcy, they cannot do so under Chapter 13; rather in this case it will be under the 7 or 11 Chapter of bankruptcy.
The second most popular form of bankruptcy filing, according to the US Bankruptcy Court: Eastern District of California. Statistics provide that this option comprised fewer than 19% or 10,130 applications of all bankruptcy filings in 2010 within the region of the Eastern district of California.
There are, as with anything in life really, pros and cons of filing for Chapter 13 bankruptcy, as well as both advantages and disadvantages as compared with filing under Chapter 7 for bankruptcy. This is perhaps where it can become somewhat technical, and the advice and counsel of an experienced bankruptcy lawyer or attorney should be sought.
In brief the Chapter 13 bankruptcy option allows for certain advantages that can be realized, of which are not an option via the Chapter 7 process, and as compared with Chapter 7, the Chapter 13 bankruptcy can be likened with more of a debt consolidation as compared to a liquidation found in Chapter 7 procedures. Factors that are taken into account within the Chapter 13 process include disposal income, as well as the level of income of which may determine the commitment of the disposable income to creditors as well as the time period thereof. Overall the time periods that are provided within the Chapter 13 option ranges between 3 and 5 years of debt repayment, and a record of such bankruptcy filing and proceedings can remain on the individual’s record for up to 10 years. This in turn may have a dramatic affect on any credit applications.
Due to the nature and potential complications of this type of personal bankruptcy it is highly recommended that you consult with an experienced bankruptcy lawyer.
* All information herein provided is for informational or educational purposes only, nothing constitutes legal advice whatsoever.