Chapter 13 is a bankruptcy form that is not so popular but is a good alternative for many. People with consistent income can consider this bankruptcy chapter to safeguard their assets and payout as much debt as possible. Chapter 13 allows for a repayment plan with restructured debt and much more practical EMIs. There might be a discharge however it is almost negligible compared to the one in Chapter 7. The tenure for the repayment can be 3-5 years. The emphasis in chapter 13 is to calculate the net disposable household income and utilize the same for a restructured payment plan for up to 3-5 years.
Chapter 13 characteristics
In case, the disposable income does not allow for covering some debts, the debts especially the non-secured ones are discharged or released. There is a threshold for unsecured debt and secured debt which is updated every 3 years, the debt of the filer should be within that bracket to ensure he/she qualifies for chapter 13. Chapter 11 is another alternative for individuals and is the only Chapter 13-like arrangement option for the businesses. However, Chapter 11 has more filing costs and filers who have more debts beyond the Chapter 13 threshold usually prefer Chapter 11. Chapter 11 is also complex by nature and needs an attorney to file, which is not the case with chapter 7 or chapter 13.
There are more updates recently which is to exclude the CARES act payments received from the disposable income calculations. Since these are relief payments they have been exempted by a law signed by the president recently. There is so much more to learn about chapter 13 and bankruptcy in general. Find the encyclopedia-like information on https://www.recoverylawgroup.com/bankruptcy/. Also, dial 888-297-6203 and connect with experienced attorneys of Los Angeles & Dallas, TX at your fingertips.