Chapter 13 Bankruptcy is a Repayment Plan

Written by Adam Peck Category: Business Law January 23rd, 2013 2 min read

Get Out Of Debt By Qualifying Chapter 13 Bankruptcy Plan:

Personal bankruptcy is usually filed as Chapter 7 or Chapter 13.

Chapter 13 bankruptcy is a repayment plan wherein the debts are gradually paid over three to five years. People file chapter 13 to save their home from foreclosure and stop creditors harassment.

What is the basic difference between Chapter 7 and Chapter 13 Bankruptcy?

According to Chapter 7 bankruptcy rules, it wipes out all the debts but it’s available only for a specific financial problem. Chapter 13 bankruptcy needs a person to pay some of his debts over certain period of time.

Above all, chapter 13 bankruptcy is a repayment plan, wherein the debts are not totally erased but they are spread over three to five years of time, according to the court approved plan.

What is a debt reduction plan?

In a debt reduction plan, an outside firm consolidates the debts into one single monthly payment which the debtors have to make, which in turn is paid to the creditor. The debt reduction plan is very similar to a debt consolidation plan and its less expensive than filing bankruptcy still people prefer to file bankruptcy over it, below given are the reasons why?

Why do people wish to file chapter 13 bankruptcy?

Chapter 13 bankruptcy avoids foreclosure
The cosigners are protected in chapter 13 bankruptcy
Creditors cannot harass people in chapter 13 bankruptcy
The debtor has to communicate only with the court and not with the creditors
The debtor’s debt is not increased.

Filing chapter 13 bankruptcy on one’s own is very complex and thus the assistance of consumer bankruptcy attorney is needed.

– from Steven Peck, Senior Attorney at Peck Law Group

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Written by Adam Peck

Expertise: Personal Injury

Adam J. Peck, ESQ is a principal with Peck Law Group, APC. In 2008, Mr. Adam Peck received his Juris Doctorate from Whittier Law School where he graduated Cum Laude. His practice is primarily dedicated to representing Elders, Dependent Adults, along with their loved ones and family members, who have suffered horrific personal injuries.