through
a deed trust payment each month. Chapter 13 permits a debtor to
repay in monthly installments for three to five years and allows
the debtor to keep all of their assets, even if their value exceeds
the amount of the exemptions allowed by the state. Chapter 13 allows
debtors to propose repayment of unsecured debts such as credit cards
at a fraction of what was owed. You may maintain your secured assets
because, over time, you will be repaying your creditors the amount
that you had fallen delinquent. To qualify for chapter 13, your
unsecured debts must be less than $250,000 and your secured debts
must total less than $750,000. In addition, you must have a stable
and regular income.
If a debtor has considerable debts that may be liquidated and lost
under Chapter 7 they may consider chapter 13. Debts that would not
be discharged under chapter 7 can be included and retained under
chapter 13. For example, if a debtor's mortgage or auto payments
are behind and they do not have the ability to bring them current,
Chapter 13 may be the answer. It will allow the arrears to be paid
back over a three to five year period and the creditors would not
be permitted to repossess the vehicle, provided the debtor made
the bankruptcy payments on time. Chapter 13 allows a debtor who
was in arrears on federal income tax to establish a payment plan
through which they can pay the IRS back over time. Under chapter
13 the automatic stay will protect any cosigners on the consumer's
debts. A chapter 13 bankruptcy is not discharged until all deed
trust payments have been made which usually takes three to five
years.
