Sick of Bill Collectors? Learn All About Chapter 13 Rules

Knowing Chapter 13 rules is an important concept for anyone considering this type of bankruptcy protection. Those who choose Chapter 13 bankruptcy are required to repay at least most of their debts, especially certain priority claims including child support. A basic bankruptcy case often does not need an attorney, though one is always recommended if you are trying to save your house by filing Chapter 13. Rules of bankruptcy have changed since 2005, but are still accessible to virtually any determined consumer.

Chapter 13 laws declare you must have steady and sufficient income to repay at least part of your debts and take care of your basic living expenses. You may need to totally liquidate your debts through Chapter 7 bankruptcy if you do not have enough stable income to satisfy the requirements of the court.

Most repayment plans must be finished within three to five years, according to current Chapter 13 rules.

Chapter 13 rules state that you cannot get any new credit while under the court-approved bankruptcy repayment plan without judicial consent. This includes seemingly ordinary tasks such as taking out a loan for college expenses, purchasing a used vehicle in installment payments or refinancing your home.

Unlike total bankruptcy, Chapter 13 laws allow consumers to include debts incurred (such as credit card cash advances) right before filing the paperwork for debt relief.

Under Chapter 13 rules, a bankruptcy filing stays on your credit report for seven years. This is three years less than Chapter 7 cases.

If you have unsecured debts, such as credit cards and personal loans, in excess of $360,475, Chapter 13 rules will not benefit you. You will be required to pursue alternative bankruptcy filings; in most cases this will have to be Chapter 7 bankruptcy. If you are a self-employed entrepreneur or business owner, you might qualify for Chapter 11 which restructures both business and personal debts if that is what you wish to do.

Whether you can apply Chapter 13 or Chapter 7 laws to your case, you do not have to hire a lawyer to help you file your petition for debt relief. But it is usually helpful for you to hire some type of legal assistance. If you must declare a Chapter 11 bankruptcy, then you are required to hire an attorney.

As of 2013, court costs for a personal Chapter 7 case are $306 as of 2013; if you have a very low income level you might qualify for a fee waiver or installment payment plan. Chapter 13 rules require full payment of $281 in court costs. A Chapter 11 case will cost $1,213; remember that all court costs are totally separate from any legal fees you might incur through hiring an attorney.

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