One of the types of financial relief that a debtor can file for is a Chapter 13 bankruptcy, which is provided for in Federal code and statue. Filing for a Chapter 13 allows the debtor to create a repayment plan of either three years or five years to pay back specific creditors in accordance to the plan. The repayment plan must adhere to the rules that govern bankruptcy, must be agreed to by all parties involved, and must be overseen by a court-appointed trustee.

When someone files a Chapter 13, it means that they are not able to repay their debt obligations as they originally agreed to do when the debt was taken on. Chapter 13 bankruptcy law allows for these debts to be reorganized for the purpose of repayment. This is different than a Chapter 7 one, in which the debts are discharged immediately instead of being set up with a repayment schedule.

In most cases, a Chapter 13 one has a repayment plan in which the debtor makes monthly, bimonthly or weekly payments to the trustee. The trustee then provides help by taking care of properly dispersing the payments to the creditors. In most instances, the amount of the debt has been restructured and is less than the full amount that is owed to all the creditors.

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This entry was posted on Saturday, December 22nd, 2007 at 12:56 pm and is filed under Financial Services. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.