Chapter 13 bankruptcy filing is a way for individuals
in the United States to undergo a financial reorganization supervised
by a federal bankruptcy court. The Bankruptcy Code anticipates
the goal of Chapter 13 as enabling income-receiving debtors a
debtor rehabilitation provided they fulfill a court-approved
plan. Compare the goal of Chapter 13 with the relief contemplated
in Chapter 7 that offers immediate, complete relief of many oppressive
debt(s).
An individual who is badly in debt can file for bankruptcy either
under Chapter 7 (liquidation, or straight bankruptcy), under
Chapter 13 (reorganization), Chapter 12 (family farmer reorganization),
or under Chapter 11.
In a Chapter 13 bankruptcy, you don't have
to hand over any property, but you must use your income to pay
some or all of what you owe to your creditors over time - from
three to five years, depending on the size of your debts and
income. Chapter 13 Bankruptcy stays on your
credit report for 7 years.
A bankruptcy is a serious negative mark against your credit
record, but Chapter 13 filings may be perceived as slightly less
serious than Chapter 7 filings since you are showing an interest
in retiring your debts.
RESOURCES: Chapter 13 Bankruptcy
United States Bankruptcy Courts
U.S. Courts: Periodicals: Bankruptcy Basics
Cornell University Law School: Bankruptcy Overview - Legal Information Institute
 |
Personal Finance
Money Tip: Pay yourself first. Try to put away at least
10% of your pre-tax income into a savings account. |
|
