You want to know the chapter 13 rules that apply so that you can determine whether this is the right form of bankruptcy to file for. Here are some quick tidbits on this particular law to help you find out if this method would be right for your situation. The first thing you need to know about chapter 13 is that it involves financial re-organization under the bankruptcy court supervision and it doesn’t
involve you selling off all your assets to pay off your creditors, as does chapter 7. Assuming you have sufficient income and levels of debt to qualify, you will get a court plan specific to your situation that you are required to file in order to fulfill your debts and receive a full discharge from those obligations.
The chapter 13 rules show that the plan needs to be executed within a three to five year time, and in this time, the creditors cannot try to get their money from you except through the bankruptcy court. Keep in mind; this is not for incorporated businesses, but for personal and self-employed bankruptcy claims. In addition, partnerships usually are not covered under chapter 13 rules, and therefore either need to go for chapter 7 or 11. This form of bankruptcy obviously sounds good, as you get to keep your personal possessions and business if you have one; you are not relieved of your debts. You need to use a lot of your income you generate over the next several years to pay the chapter 13 plan in full and get a discharge. As opposed to a chapter seven, where your debts are completely voided after selling off your assets, under chapter 13 rules you are obligated to continue paying off those debts.
Therefore, in some instances you might actually prefer a chapter 7 bankruptcy, as you can at least wipe the slate clean and start over. With that said, more often than not, if you manage your money correctly, it is definitely best to keep your assets while paying off your debt, but it is not always easy to qualify. In order to do so for chapter 13, you need to have a relatively stable income stream, secured debts which total fewer than eight hundred and seventy thousand, and unsecured debts under two hundred and ninety grand. Therefore, whether or not you qualify depends completely on your individual situation. A good lawyer will be able to advise you on all the specific chapter 13 rules and help you determine whether you would make a good candidate for this form of bankruptcy. There are affordable and experienced bankruptcy attorneys in your area.