Chapter 13 Bankruptcy Keep Your Property & Repay Debts Over Time, 11th edition, published by Nolo (www.nolo.com) and written by Kathleen Michon, Attorney and Stephen Elias, Attorney, gives a person thinking about filing Chapter 13 bankruptcy checklists on whether the person should go for Chapter 13 versus Chapter 7, how to cancel as much debt as possible, stop a house foreclosure, make up a missed mortgage payment, the court systems and bankruptcy petition completion, and how to rebuild credit after bankruptcy.
The 11th edition of the book is a good starter to educate someone on bankruptcy terminology so the person will be less fearful of the bankruptcy process, and be more prepared to complete the bankruptcy petition, deal with trustees, and appear at court hearings. This book has been read by many law students and attorneys, not just lay people not educated in the laws. The book contains user-friendly information on how to complete a bankruptcy petition, understand recent court case decisions, and create a budget.
Unlike Chapter 7 bankruptcy, which is about liquidation, Chapter 13 bankruptcy allows a debtor to keep property and repay debts over a period of time (usually 3 to 5 years). Chapter 13 is known as the bankruptcy for wage earners because a person is not able to wipe away all debts. Because the person makes income, there is fairness to require the person to pay off some of the debts over time. A debtor’s repayment plan (or Chapter 13 Plan) needs to be approved by the bankruptcy court.
After a 341 hearing, a debtor or the legal representative needs to attend a hearing open to the public on the repayment plan. At the hearing, a judge will discuss a person’s repayment plan with the trustee, and ask the debtor or the attorney any questions to make sure the person is able to make the monthly payments under the plan. The creditors may object to the plan. Once a plan is approved, a debtor begins making payments pursuant to the plan. Part of the payments goes towards paying the trustee’s fees. When the repayments are complete, any remaining unpaid debts will be discharged in full.
When filing for Chapter 13 bankruptcy, a person should be aware that not all debts are dischargeable. For instance, the following debts may not be dischargeable in Chapter 13 bankruptcy:
• child support
• debt from driving under the influence
• 401(k) loan debt
Learn more about Chapter 13 bankruptcy from an experienced New York bankruptcy attorney.