Chapter 13 is a reorganization in which you offer a plan to your creditors that would pay them a certain percentage of the amount claimed. If the majority of those creditors approve the plan, then you would make your monthly payments to a trustee over a period which is either three years or five years. As long as you make your timely payments, the creditors cannot pursue any claims against you at the end of the plan’s period. Chapter 13 is more beneficial for people who have property that they want to keep that can’t be categorized as exempt under Chapter 7.
Are There Requirements That I Must Meet In Order To File A Chapter 13 Bankruptcy?
First of all, you have to be an individual, and you can’t be a business entity. Chapter 13 is only available for individuals and married couples. Also, you can’t have filed for bankruptcy within a specific time before you file for Chapter 13. You must have disposable income, which means that you earn enough money that after spending for necessities (food, childcare, etc.), you have leftover money to pay your creditors. If you don’t have any income, or have no disposable income, or are receiving non-taxable income like social security income or SSDI, there is no benefit to filing a Chapter 13 because you don’t have enough of a revenue stream to make a plan and pay off your creditors.
What Are The Major Differences Between A Chapter 7 And a Chapter 13 Bankruptcy? How Do I Know Which One Is Right For Me?
Chapter 7 is a complete bankruptcy. You choose Chapter 7 if you don’t have many assets and if you don’t have disposable income. So, you do a Chapter 7, and it will end in a discharge of most of your debt. Chapter 13 is a reorganization. It is for a situation where you have some assets that you probably want to keep and that you have enough stream of revenue coming in and disposable income enough to pay off your creditor in a plan. Your debts are not discharged until you complete the plan.
Additional Information On Bankruptcy Laws In Massachusetts
We know that they have increased the filing fee for bankruptcy in Massachusetts. We are concerned that after protections given by many state and federal governments for COVID-19 expire, we might expect to see a flood of people filing for Chapter 7 or Chapter 13 bankruptcies.
For more information on Filing For Chapter 13 Bankruptcy In MA, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (617) 752-7571 today.
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