What Is Chapter 13 Agreement

All payments must be made in the form of a money order or bank cheque. Be sure to include your name, address and file number. The Office of the Chapter 13 Trustee does not accept cash payments. The discharge in a Chapter 13 case is somewhat broader than in a Chapter 7 case. Debts excusable in Chapter 13 but not in Chapter 7 include debts for intentional and malicious infringement of property (as opposed to a person), debts incurred to pay non-excusable tax obligations, and debts arising from property settlements in divorce or separation proceedings. 11 U.S.C§ 1328(a). Chapter 13 offers individuals a number of advantages over the liquidation provided for in Chapter 7. Perhaps most importantly, Chapter 13 offers individuals the opportunity to save their homes from foreclosure. By filing an application under this chapter, individuals can terminate foreclosure proceedings and remedy mortgage payments that are overdue over time. Nevertheless, they must make all mortgage payments due during the Chapter 13 plan on time. Another benefit of Chapter 13 is that it allows individuals to reschedule a secured debt (other than a mortgage for their principal residence) and extend it for the duration of the Chapter 13 plan. This can reduce payments.

Chapter 13 also contains a special provision protecting third parties who are liable with the debtor for “consumer debts”. This provision may protect co-signatories. Finally, Chapter 13 behaves like a consolidation loan, where the person makes the plan payments to a Chapter 13 trustee, who then distributes the payments to creditors. Individuals have no direct contact with creditors when they are protected by Chapter 13. A Chapter 13 debtor may be able to reduce the initial mortgage balance of the non-real estate to the current estimate of the property (a “pile-up”). This is a somewhat complicated process that requires a certified valuation of the property. The debtor must be able to financially pay 100% of the mortgage balance completed during the Chapter 13 plan (usually with a lump sum payment due in the 24th month of your plan). This chapter of the Bankruptcy Act provides for the adjustment of the debts of a person with a regular income. Chapter 13 allows a debtor to retain ownership and repay debts over time, usually three to five years. The federal bankruptcy law allows the debtor to dismiss or convert a Chapter 13 matter to Chapter 7 at any time, unless your case has already been converted from another chapter of the Bankruptcy Act. No one can force you to stay under a Chapter 13 plan if you don`t want to stay.

If you want to stop your case, contact your lawyer. A debtor referred to in Chapter 13 shall have the right to discharge himself from his debts upon completion of all payments made under the Chapter 13 plan, provided that the debtor: (1) certifies (where applicable) that all internal maintenance obligations due prior to the issuance of such a certificate have been paid; (2) in an earlier case submitted within a certain time limit (two years for previous Chapter 13 cases and four years for previous Chapter 7, 11 and 12 cases), no discharge was granted; and (3) has completed an approved course in financial management (if the trustee or U.S. receiver of the debtor`s district has determined that such courses are available to the debtor). 11 U.S.C§ 1328. However, the court will not grant discharge until it finds, after notice and hearing, that there is no reason to believe that ongoing proceedings are ongoing, which could lead to a restriction of the debtor`s exemption from the debtor`s exemption from ownership. 11 U.S.C§ 1328(h). The filing of the petition under Chapter 13 “remains automatic” (stops) most debt collection actions against the debtor or its assets. 11 U.S.C§ 362. However, in filing the petition, certain types of lawsuits listed under 11 U.S.C§ 362(b) are not suspended, and the stay can only be effective for a short period of time in certain situations. Suspension is automatic and does not require any legal action. As long as the deferral is in effect, creditors are generally not allowed to initiate or pursue lawsuits, wage garnishments, or even phone calls demanding payments.

The receiver notifies the bankruptcy case to all creditors whose names and addresses are provided by the debtor. Insolvency law with respect to the scope of the Chapter 13 discharge is complex and has recently undergone major changes. Therefore, debtors should consult competent legal counsel before filing the Chapter 13 release. .

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