Chapter 13, Title 11, United States Code

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The title of 11 â € <â € Chapter 13 of the United States Bankruptcy Code gives individuals the opportunity to propose a reorganization plan to reorganize their financial affairs while under bankruptcy court protection. The purpose of chapter 13 is to enable an individual with a regular source of income to propose a plan of chapter 13 that provides his various creditor classes. Under chapter 13, the Bankruptcy Court has the power to approve the 13 chapter plan without the creditor's consent as long as it meets the requirements of the statute under chapter 13. Chapter 13 plans are usually three to five years in length and should not exceed five years. Chapter 13 differs from the purpose of Chapter 7, which does not provide a reorganization plan, but provides for the disposal of certain debts and the liquidation of non-excluded property. The Chapter 13 plan can be seen as a form of debt consolidation, but Chapter 13 allows a person to achieve more than consolidate unsecured debt such as credit cards and personal loans. The Chapter 13 plan can provide three general categories of debt: priority claims, secured claims, unsafe priority claims, and unsecured public claims. Chapter 13 plans are often used to cure arrearages on mortgages, avoid "underwater" junior mortgages or other liens, pay back taxes over time, or partially pay off unsecured debt. In recent years, some bankruptcy courts have allowed Chapter 13 to be used as a platform to speed up mortgage modification applications.

Video Chapter 13, Title 11, United States Code

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A badly indebted individual can usually file for bankruptcy either under Chapter 7 (liquidation, or immediate bankruptcy) or Chapter 13 (reorganization). In some cases, options may also include Chapter 12 (reorganization of farm families) and Chapter 11 (corporate reorganization, or individual debtors whose debts exceed the limit for Chapter 13 submissions). Because Chapter 11 bankruptcy is much more complicated and expensive than the case of Chapter 13, some debtors will vote for Chapter 11 if Chapter 13 bankruptcy is an option.

The debtor may also be forced to bankruptcy by the creditor in the case of an accidental bankruptcy, but only under Chapter 7 or 11. However, in many cases the debtor may choose under which chapter to file. In the case of an accidental bankruptcy, the debtor may also choose to convert from forced Chapter 7 or 11 proceed into proceeding under another chapter.

The debtor's financial characteristics and the type of help sought played a tremendous role in choosing the chapter. In some cases, the debtor can not file it under Chapter 13, as he does not have the single-use income necessary to fund a reasonable Chapter 13 plan (see below). Furthermore, Section 109 (e) of Title 11, the United States Code imposes a debt limit for individuals to qualify for filing under Chapter 13: unsecured debt less than $ 394,725.00, and secured debt less than $ 1,184,200.00.

Under Chapter 13, the debtor proposes a plan to pay his creditors for a period of 3 to 5 years. This written plan details all the transactions (and the period of time) that will occur, and repayments as planned should begin within 30 to 45 days after the case begins. During this period, his creditors can not try to collect debts that were previously borne by individuals except through a bankruptcy court. In general, an individual may retain his property, and his creditor ends up with less money than he should, is the amount given to the debtor to continue accumulating interest, allowing the debtor to find a way to pay the amount owed without losing their assets completely.

Losses

The disadvantage of a personal bankruptcy filing is that, under the Fair Credit Reporting Act, this record remains on individual credit reports of up to 7 years (up to 10 years for Chapter 7). But you can earn new debt or credit (credit card, Auto, or consumer loan) after 12-24 months, and can get a new FHA mortgage loan 25 months after the release and loan of Fannie Mae and Freddie Mac after 36 months. But during the postponement of the Chapter 13 case, the debtor is not allowed to obtain additional credits without permission from the bankruptcy court. In addition, creditors may not want to risk lending money to such individuals. However, these losses are not unique to Chapter 13; may also apply to individuals currently in the case of Chapter 11, Chapter 12 cases or those who are new or just in the case of Chapter 7.

Benefits

The advantages of Chapter 13 above Chapter 7 include the ability to: stop foreclosure even if foreclosures will be recovered after the completion of bankruptcy; achieve a super debit of the indispensable debts under Chapter 7; collateral value ; divides the two security interests of the creditor in a particular property to which the creditor is charging too much interest for, or over-guaranteed, or both, and leading to cramming the debt modification; prevent collection activities against non-filing co-signers (co-debtors) during the term of this case.

Maps Chapter 13, Title 11, United States Code

Chapter 13 plan

A Chapter 13 plan is a document filed with or immediately after the request 13 of the debtor's bankruptcy.

The plan details the handling of debts, liens, and the asset and liability status of assets owned and/or owned by the debtor in respect of its bankruptcy petition. In order for the plan to be implemented, it must meet a number of requirements. This is specified in Ã, § 1325 and includes:

• provided that unsecured creditors will receive at least as much through the plan of chapter 13 as they would do in chapter 7 of liquidation
• no objection, pay back all creditors, or surrender all income from the debtor to the Chapter 13 plan for at least three years (or five years for debtors earning above average)

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References

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Further reading

United States Bankruptcy Code; 2016 Edition . ISBN: 9781942842033. Ã,

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External links

• The United States Bankruptcy Code through the Cornell Legal Faculty's Legal Information Institute
• National Consumer Bankruptcy Lawyers Association
• United States Court, Bankruptcy

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