Chapter 13 is a type of bankruptcy that is referred to as a reorganization or repayment plan. The debtor will have to pay the full or portion of his debts. The debtor must first present a repayment plan in the bankruptcy court so that it can be approved. This means that the debtor will pay his debts with the protection of the court. Within this time the debtor will have to pay his debts to a chapter 13 trustee. The trustee will distribute the money paid by the debtor to the creditors. The only time the debtor is released from his debts is when the repayment plan is completed.
When you file personal bankruptcy chapter 13 you have to know its disadvantages, this can help you in making your decision if you will push through with filing for bankruptcy chapter 13 or not. The main disadvantage of bankruptcy is that the duration of bankruptcy status will last for a number of years. This bankruptcy status leaves a huge red mark on your credit report and this affects your chances in obtaining a new credit. Bankruptcy can also affect an individual’s future employment. It will be hard for employers to hire an individual for a managerial position that has a history of bankruptcy. Make sure also that you have a steady income for the duration of the repayment plan, being unable to pay the amount that is stated in the repayment plan can make the bankruptcy court dismiss your chapter 13 type of bankruptcy. This will make you convert your bankruptcy to a chapter 7 type of bankruptcy. Another factor that can be a disadvantage of filing for a chapter 13 is the cost and the time it takes to file this type of bankruptcy. Chapter 13 is more expensive and takes much longer to file compare to chapter 7. Knowing the disadvantages of bankruptcy chapter 13 can make you more aware on how to deal with problems later. If you finally decide to file personal bankruptcy chapter 13 there are a few ways you can keep the cost down. You can start by filing bankruptcy chapter 13 without a lawyer. This can save you a lot of money but this takes a lot of work. You can download chapter 13 bankruptcy forms in the internet and file your paperwork electronically. Just be aware of the risk that if you make any mistakes in preparing your paper it can cost you to lose more assets.
Another way that I suggest can avoid this risk. All you need to do is hire a petition preparer or a bankruptcy lawyer to prepare your papers, and then pay them their flat fee. The rest of the filing you can do it by yourself. This way you will not have to deal with the headache of preparing your papers and run the risk of making a mistake. Having a bankruptcy lawyer can also clear up some misconceptions that you have about bankruptcy. For more support on how to file bankruptcy, visit the link below.
Originally posted 2009-11-21 07:10:34. Republished by Old Post Promoter
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