Chapter 13 Bankruptcy
Although creditors might object to the plan, the court has the final ruling in these cases. If the debtor makes the required payments to the Chapter 13 Trustee, based on the proposed plan, they are legally entitled to keep their property.
One of the advantages of filing Chapter 13 cases over Chapter 7 is that some of the debts that cannot be discharged in 7 can be discharged in 13 For example, depending on the fair market value for your house, your second mortgage could be “stripped off” in a Chapter 13 bankruptcy, and treated like any of your unsecured debts (i.e., credit cards), only receiving whatever monies are available based on the calculations of disposable income after all other mortgage and auto payments are made. Also, the debtor can pay some non-dischargeable federal taxes over the term of the Chapter 13 plan without interest.
Chapter 13 can only be filed by an individual, not a corporation. A debtor who also owns a business is allowed to operate it under Chapter 13 while still paying off their debts.
David Giller, Esq. is a Consumer Law attorney, providing professional, confidential and compassionate legal advice throughout New York City and northern New Jersey in financially stressful matters including bankruptcy, foreclosure defense, debt settlement, Fair Debt Collection Practices Act and Fair Credit Reporting Act. To learn more about David or his law practice, visit www.gillerlaw.com.
