Chapter 13 _ A Plan to Pay Something
You may have heard about a kind of Bankruptcy that sets up a Plan for payment against the bills you owe. There are specific rules, but generally Chapter 13 allows you to stretch your payments over a longer period of time, and creditors that are not secured can be paid less than the face amount of the bill.
What is Chapter 13?
If you have property you wish to keep, which is not exempt, you may want to consider a Chapter 13 plan, known as REORGANIZATION or a WAGE EARNER PLAN. This works like a consolidation loan, but you don't borrow money.
Your Attorney (or you if you are capable) prepares a PLAN, based on your income and living expenses. The Plan has to follow specific rule of the Bankruptcy Law. Once the Court approves it, you make payments to the TRUSTEE, and he pays the creditors in the Plan. So there is one monthly payment for bills 'in the Plan', while you would pay any living expenses or bills 'outside the Plan'.
In a Chapter 13, the Trustee does not take anything from you, because your PLAN pays the debts the same amount that would be paid in a Chapter 7 case. SECURED creditors have to be paid the value of the security and usually not less than their normal monthly payments.
Your plan can extend the payoff of the creditors for up to 5 years. As soon as you file, GARNISHMENT, and all other collection efforts must stop. You can also reduce some interest rates during the term of the PLAN.
G. Paul Marx, A Professional Law Corporation
CHAPTER 13 TOPICS: TRUSTEE YOU GET YOU PAY THE PLAN
THE U.S. Congress and President Bush have authorized us by law to state that as to our Bankruptcy Work at this Law Firm, WE ARE A DEBT RELIEF AGENCY. WE HELP PEOPLE FILE FOR BANKRUPTCY RELIEF UNDER THE BANKRUPTCY CODE.