Chapter 13 Bankruptcy And The Things We Need To Know

Bankruptcy is a legal procedure for dealing with debt problems of individuals and businesses according to the United States Federal Court

. As this bankruptcy comes in different types, people can choose whats best for what they need. One type of bankruptcy is the so called Chapter 13 bankruptcy. This particular type of bankruptcy is commonly referred to as debt adjustment bankruptcy. Just recently, there was a rejection on the principal paydown plan for Chapter 13 homeowners from the Federal House Finance Agency (FHFA).

The National Association of Consumer Bankruptcy Attorneys (NACBA) created this Principal Paydown Plan as a way of assisting homeowners filing for a Chapter 13 Wage Earner bankruptcy. Under this plan, principal payments under a five-year interested-free plan will only be paid by chapter 13 debtors so that they can avoid their homes getting foreclosed. Chapter 13 debtors can actually get many benefits from this plan if only it was not rejected. Now, it may be important if we understand all about Chapter 13 bankruptcy as this plan is still under the hands of FHFA.

Allowing one to create a debt repayment plan that one can manage financially is the essence of a Chapter 13 bankruptcy. These benefits can only be achieved once petition has been filed. A financial summary of a person including ones income, debts, assets, and lists of creditors must be shown in this petition. Moreover, there are certain people that can only file for this type of bankruptcy. These people must have unsecured debts less than $360, 475 and secured debts less than $1, 081, 400.

A debt adjustment plan must be made by a debtor as part of the Chapter 13 bankruptcy process. This plan will summarize the debts you will be paying, the time it takes to repay it, the manner of paying them, and what debts you will pay or will not be paying in a reduced amount. However, a bankruptcy judge must first approve this plan. It is important to ensure that the debt adjustment plan one will be making must be a reasonable one basing on your abilities and resources. Once this plan gets to be approved by a judge, the creditor cannot force you to pay for something that is not part on that plan. Many people in Arizona have opted to file for an Arizona Chapter 13 Bankruptcy because of these reasons.

by: John Raymond Collado

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