A Chapter 13 is a repayment proceeding that combines the benefits of the automatic stay provisions of a Chapter 13 while repaying creditors over a three to five-year period.
Any debtor seeking Chapter 13 protection still must qualify to file. Their unsecured debt cannot be more than $360,475 and secured debt over $1,081,400. These figures are adjusted for inflation on a periodic basis.
A filer must also have adequate disposable income to meet his or her obligations under a plan that is presented to the trustee for approval. Your disposable income is determined by subtracting your monthly expenses and secured payments, such as auto and mortgage, from your gross income.
Your disposable income can include any number of sources including welfare, spousal maintenance, child support, or disability payments.
Your plan, to be approved, must show that you can pay back your creditors in full over the term of the plan.
You must not have had a bankruptcy petition dismissed in the 180 days before you file for failing to comply with a court order, be current in your income tax filings for the past four years, and have completed a credit counseling course within 180 days of filing your Chapter 13.
A Chapter 13 allows debtors with real estate other than their homes to retain this property so long as their secured debt does not exceed the imposed limit. Homeowners facing foreclosure can keep their homes if they have adequate disposable income to keep their mortgage payments current and can pay the arrearages over the life of the plan.
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