Class is still in session in the Mankato, Minnesota area! Please take your seats, sharpen your pencils, and prepare for your second week of Bankruptcy 101. Last week was all about Chapter 7 which means that, today, we’re going to focus on another type of bankruptcy: Chapter 13.
We at Behm Law Group, Ltd. have prepared another overview to help you decide which type of bankruptcy is best for you. So, without further ado, here’s part one of our Chapter 13 study guide:
- Q: What exactly is Chapter 13 bankruptcy?
A: Chapter 13 is a type of bankruptcy that allows debtors to gradually repay some (but not all in most cases) of their debts. This is why it’s often called a “wage earner’s plan.”
- Q: In order to file, do debtors need to have a consistent income?
A: Yes. This is because payments to a chapter 13 trustee are made in regular installments over a period of time.
- Q: How long does a debtor have to repay these debts?
A: A chapter 13 bankruptcy must last at least 3 years. Sometimes, however, it can go for 5 years. The maximum time a chapter 13 bankruptcy case last is 5 years.
- Q: Do debtors have to confront their creditors through out the process of filing?
A: No. Debtors don’t need to have any direct contact with their creditors.
- Will Chapter 13 bankruptcy erase all outstanding debts and payments?
A: Debtors are still responsible for paying certain expenses, such as mortgages, but are able to halt foreclosure and allow extra time for other payments such as payments on tax debts and mortgage delinquencies.
- Q: Who can file for Chapter 13 bankruptcy?
A: Individuals are eligible for this type of filing, but generally corporations and partnerships do not file for chapter 13 bankruptcy protection.
- Q: Which documents are required for a Chapter 13 filing?
A: At a minimum, four documents are required: a creditor list, the debtor’s documented income, the debtor’s documented property, and the debtor’s documented living expenses.
If you live in the Mankato area and believe Chapter 13 is the right kind of bankruptcy filing for you, contact the professionals at Behm Law Group, Ltd. today. Class dismissed!
