Chapter 13 Law

Chapter 13, popularly known as the repayment plan, is a technique of reorganizing bankruptcy. It does not incur interest and follows the system of interest-free repayment plan, where a debtor repays his unsecured debts. This law is codified under the title 11 of the United States. It aims at enabling the debtors who receive incomes to treat his debts, ultimately settling them down.

Advantage of chapter 13
Chapter 13 is that it provides individual debtors with an opportunity to save their homes from foreclosure by allowing them to "catch up" past due payments through a payment plan. Moreover, the court may dismiss a chapter 7 case filed by an individual whose debts are primarily consumer rather than business debts if the court finds that the granting of relief would be an abuse of chapter 7. One of the important benefits of Chapter 13 is that the debtor generally can continue to live in his or her home so long as the debtor complies with the terms of the Chapter 13 arrangement. If the debtor fails to comply, the Court treats the matter as Chapter 7 liquidation.

How Chapter 13 Works
A Chapter 13 case begins by filing a petition with the bankruptcy court serving the area where the debtor has a domicile or residence. Unless the court orders otherwise, the debtor must also file with the court:
•    Schedules of assets and liabilities;
•    A schedule of current income and expenditures;
•    a schedule of executor contracts and unexpired leases; and
•    A statement of financial affairs.

The Chapter 13 Discharge
The bankruptcy law regarding the scope of the chapter 13 discharge is complex and has recently undergone major changes. Therefore, debtors should consult competent legal counsel prior to filing regarding the scope of the chapter 13 discharge.For Expert consultation on Bankruptcy Law you can, take advice from Bankruptcy Lawyer or Bankruptcy Attorney in your area.