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The cost of filing Chapter 13 bankruptcy plans is somewhat higher
than filing Chapter 7, because of bankruptcy Chapter 13 differences from
Chapter 7. These differences provide several distinct advantages. Most
importantly, past due payments may be rolled into the plan. Because of
this unique provision, foreclosures, repossessions and tax seizes are
stopped and the underlying debt is considered paid current. This option
is simply not available in Chapter 7.
Also, when filing Chapter 13 bankruptcy, debtors are not required to
repay all debts, but may repay only the portion determined by their
disposable income over the life of the plan. At the end of the plan
term, the remaining balance on debts is discharged similar to a Chapter
7 case. Be aware however that some debts are non-dischargeable, and must
be repaid in full. Examples of non-dischargeable debts include taxes,
fines owed to government units, child support, and court ordered
restitution for crimes.
Requirements filing Chapter 13 bankruptcy
According to Chapter 13 bankruptcy laws, an individual may file so
long as regular income is sufficient to pay living expenses and the
resulting disposable income is contributed to a repayment plan. Chapter 13 repayment plans
last between 3 to 5 years, while debtors who earn more than the median
income for their state of residency must file 5 year plans in most
cases.
After filing, debtors must attend a 341 meeting, a hearing for the
confirmation of the plan, and hearings to resolve objections, if any.
Most often, so long as differences are worked out with the trustee,
debtors who file conforming plans will be confirmed. Before
confirmation, all debtors should begin making proposed payments. After
confirmation, the trustee provides Chapter 13 payment instructions with
the proper amount owed, with adjustments, if any.
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