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What is Chapter 13?
“Chapter 13” is a bankruptcy proceeding authorized by the United States Code, Title 11, Chapter 13 (11 U.S.C. 13) which allows individuals with regular income or small proprietary businesses to propose a plan of reorganization to pay all or a portion of their debts.
In order to qualify, you must have regular income that allows your normal everyday expenses—such as food, housing, utilities, etc…., and have money left over to pay into your Chapter 13 plan. In addition, the total amount of your debt owed must not exceed $336,900 for unsecured debt and/or $1,010,650 for secured debt, pursuant to 11 U.S.C. 109(e).
Once you have filed for Chapter 13 bankruptcy, you must start making payments to the Trustee by the 25th day of the month following your filing date. For example, if you filed anytime during January, your first payment to the Trustee would be due February 25.
You must file all the required documents which includes a complete list of all of your creditors and all of your assets, the amount of your income and expenses, and what you propose to pay to the Trustee in your Plan of reorganization. If the Court approves and “confirms” your Plan of reorganization, the Trustee will begin disbursing the payments he has received from you to your creditors in accordance with the approved Plan. You must continue to make your Plan payments until the plan has been completed. Most plans of reorganization are from 36 months to 60 months.
You can obtain more detailed information on what a Chapter 13 Bankruptcy is as well as terms and their definitions by clicking the link below.
ANSWERS TO COMMON QUESTIONS ABOUT
Also below is a listing of additional links that will provide you with useful information in regards to what a Chapter 13 is.
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LAWRENCE J. LOHEIT |
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CHAPTER 13 TRUSTEE |
