What Is Chapter 13 Bankruptcy, And Why Do I Need A Chapter Thirteen Bankruptcy Attorney


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An individual with a regular income whose debts do not exceed certain amounts (which are adjusted every three years, and effective 4/1/04 are set at the maximum of $307,675 in unsecured debts and $922,975 in secured debts), are eligible to file a chapter 13. An individual who operates a business as a sole proprietor is also eligible, but chapter 13 is not available to corporations or partnerships. Chapter 13 generally permits individuals to keep their property by dedicating a certain amount of their future income for a period of between 3 and 5 years to repayment of their debts. Each chapter 13 debtor proposes a repayment plan which may call for full or partial repayment of all debts and must be approved by the court. Payments are made to the chapter 13 trustee who distributes the funds for a small fee. Many debts that cannot be discharged can still be paid over time in a chapter 13 plan. After completion of payments under the plan, chapter 13 debtors receive a discharge of most debts.

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