Did you know Chapter 13 bankruptcy is regarded as the usual solution for wage earners, when bankruptcy seems inevitable? By filing a Chapter 13 bankruptcy petition, one is protected from creditors seeking to obtain possession of one’s real or personal properties in satisfaction of the debt. This legal option also allows the debtors to repay their Keep your homeobligations.
Chapter 13 bankruptcy law in Utah provides that debtors can propose repayment plans that allow them to satisfy their liabilities according to their means, taking into account their monthly income and other available resources. Debtors have the option to pursue a repayment plan spanning for 3 or 5 years. During the period of Chapter 13 bankruptcy protection, creditors are prohibited from pursuing efforts to collect the debts due them.
You’ve probably heard about Chapter 7 bankruptcy. If you have a sincere desire to repay your debts in terms that are favorable to you, there are several points that indicate Chapter 13 is a better option. If you are torn between filing a Chapter 7 and a Chapter 13 bankruptcy petition, perhaps some more information can help make up your mind. Here are some of the many advantages of Chapter 13 bankruptcy law in Utah.
What’s involved in a Chapter 13 Bankruptcy?
The most significant feature of Chapter 13 bankruptcy that edges Chapter 7 is the opportunity given to debtors to save their homes from being levied, foreclosed, or sold on execution. While under Chapter 13 protection, creditors shall cease direct contact with the debtors. The filing of a Chapter 13 bankruptcy petition also cures any delinquent mortgage payments, giving the debtors the chance to reschedule payments. This paves the way for lower, more affordable payments on the part of the debtor. Usually this process and these payments are resolved in less than five years.
To be eligible for Chapter 13 bankruptcy law in Utah, the petitioner-debtor must be an individual; juridical entities like corporations and partnerships are not qualified. As of 2015, the individual debtor’s unsecured and secured debts must not exceed $383,175 and $1,149,525, respectively, to avail for this legal option.
An individual debtor cannot avail of Chapter 13 protection if he or she previously filed a bankruptcy petition but the same was dismissed for failure on his or her part to appear before the court or comply with its orders. To be admitted to bankruptcy protection, the debtor must also show that he or she has undergone credit counseling from an accredited agency at least 180 days prior to the filing of the petition.
The Chapter 13 bankruptcy proceedings are commenced by the filing of the petition with the bankruptcy court of the place where the debtor resides. Accompanying the petition are the following documents, among others: schedule of assets and liabilities, a statement of current income and expenditures, an account of all financial affairs, and certification of credit counseling. Filing and other court fees must also be paid, which the court may permit to be made in installments.
Because of the automatic stay provision under Chapter 13, co-debtors also benefit from the protection it provides upon the filing of their co-debtor; therefore their properties are also beyond their creditors’ reach.