Bankruptcy Rules

The Most Important Chapter 13 Bankruptcy Rules

Bankruptcy is a very big step you might need to make in your life. It is also the step that will follow you for 7-10 years on any route you might take. Today, the requirements are much tighter than they used to be some time ago, due to some recent changes in bankruptcy law. If you are thinking to file bankruptcy under Chapter 13, you should be well aware of the chapter 13 bankruptcy rules. Here is a short guide for you.

The first step you need to make is file a 2 page form in the court, filing for bankruptcy under Chapter 13. The “petition” has to be signed by all debtors. Once filed, the so called automated stay is put into motion. This means that your creditors cannot ask for money from you or bring you to court to collect their money. The court will give you a docket number which can stop all possible foreclosure proceedings.

Chapter 13 is basically a repayment plan. You will set a 5-7 year schedule with your creditors and bankruptcy will remain on your report for 7-10 years. However, the most important reason why chapter 13 is preferred by many people is that they get to keep all their property, including their home.

Chapter 13 is a recommended solution for debtors who have been delaying their regular payments because of a temporary problem – a change of job for instance; debtors do not see a Judge when filing under chapter 13. They are usually assigned a Trustee, who can handle their case and its particulars. The debtor can appear in front of a judge only if the creditors contest the case and the Trustee cannot resolve the issue in an efficient way.

According to chapter 13 rules the payment is made through the Trustee, based on the anticipated debtor’s income over the plan’s life.