Posted by on Feb 2, 2014 in Chapter 13 Bankruptcy | 1 comment

Advantages of Filing Chapter 13 Bankruptcy

Chapter 13 Bankruptcy law, also called Debt Adjustment or Repayment Plan and Wage-earner’s Plan, allows debtors to design a three-year (extended to five years with the court’s permission) payment proposal through which they may settle their debts from their creditors. This payment proposal is meant to enable debtors to make payments more affordable for them. Chapter 13 also allows debtors to keep their properties and assets; for business owners, they can continue the operation of their business, which may be the major source of income and payment for debts.

The bankruptcy law is intended to help individuals and business firms to have control over their finances when debts have surmounted to an amount already quite impossible to manage. It is a legal procedure wherein debtors can declare incapability to pay and completely settle debts.

Upon filing of bankruptcy, the law requires that creditors or law firms, to which collection of debts has been endorsed due to non-payment for at least six months, to cease from further attempts to collect payment. This means end to all forms of communications, like text messages, e-mails, phone calls and letters which often serve as means to harass debtors to force them to pay. Bankruptcy also rules out any chance of filing a lawsuit against the debtor, to garnish his/her salary or impose a levy on his/her bank savings or a lien on his/her properties.

Chapter 13 is a private debt-adjustment type of bankruptcy; it is filed with the U.S. Bankruptcy Court, which protects and controls it. Self-employed individuals or owners of unincorporated business firms may find this particular bankruptcy chapter as the right legal option that will save them and/or their business from overwhelming debts.

Besides letting you keep and safeguard all of your assets and run your business even while the repayment plan is in effect, Chapter 13 bankruptcy law also provides more extensive coverage as to what debts may actually be discharged (some of the dischargeable debts are debts from card companies, businesses and individual loans, debts due to property settlements and separation proceedings, debts resulting from willful and malicious damage to one’s property, debts incurred through non-dischargeable tax requirements and medical bills).

It is always advisable to have a good bankruptcy lawyer counsel and help you in all the paper works, preparation of documents and procedures that need to be gone through in a bankruptcy proceeding. But since not all lawyers have the same in-depth knowledge of the bankruptcy law or experience in bankruptcy proceedings, you need to act well in choosing who would represent you, as well as defend your rights in court.

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