Chapter 13 Bankruptcy Rules - Declaring Bankruptcy

There are many chapter 13 bankruptcy rules that you will need to know about if you are considering filing

. Of course the first piece of bankruptcy information you need to know is which chapter to file. Chapter 7 (liquidation) bankruptcy is a full "pardon" of all debts and is considered the grandaddy of all bankruptcies. In Chapter 7, the bankruptcy court will appoint a trustee to represent the interests of your creditors. After a month or so from the date of the filing, you have to be present at a meeting of creditors in which the trustee will answer all questions regarding your assets, debts, and other financial information. Despite the name, banks and creditors hardly ever are at these meetings. Once finished with the meeting, the trustee liquidates the property that may be taken from you. He or she will then take the cash and split it amongst the creditors. Once the full liquidation is done, the court will schedule one last hearing and discharge all debts. At this point, you no longer legally owe your creditors and they are forbidden from trying to collect anything from you.

Chapter 13, on the other hand is a restructuring bankruptcy in which not all of the debts are resolved, because the debtor still has the ability to pay some of the bills. A Chapter 13 (wage earner) bankruptcy case begins by filing the same papers as under a Chapter 7. In addition, you must file a workable plan for repaying your debts with the bankruptcy court, which will approve the plan. You start sending payments directly to the chapter 13 trustee shortly after filing. The trustee then pays your creditors according to the terms of the court-approved plan. When you have repaid your creditors according to the plan, a court hearing will be held and you will be discharged. The debtor is protected from lawsuits, garnishments, and other creditor actions while the plan is in effect. Of course, if you have been having financial difficulties and are considering declaring chapter 7 bankruptcy or chapter 13 bankruptcy, you should always first consult a bankruptcy attorney. He or she can go through the many chapter 13 bankruptcy rules and can assist you in any type of filing or debt consolidation or debt settlement.

Chapter 13 Bankruptcy Rules - Declaring Bankruptcy

By: Alexander Travis

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