A family in Carbon County may have several reasons to consider filing a Chapter 13 bankruptcy in the event they fall on financial hard times. As this blog has mentioned previously, a Chapter 13 bankruptcy is a bit different than the more common Chapter 7 in that it requires a debtor to get the court's approval of a repayment plan. After following through on the repayment plan, a family will be discharged from any outstanding debt.
One of the overwhelming fears that Pennsylvania debtors carry with them about bankruptcy is the concern that they will have nothing left when the process is over. Despite the debts, individuals may worry about losing the rooves that are over their heads or the cars that they drive to their jobs. While Chapter 7 bankruptcy does involve the selling off of property in order to pay creditors, Chapter 13 bankruptcy offers a different type of solution to burdensome debts.
Chapter 13 bankruptcy is also known as a wage earner's plan, or debtor's court. This is because its purpose is to allow debtors to consolidate creditor payments over a three to five-year period. Those payments can include amounts on which a debtor has fallen behind, such as a home mortgage or car note, while allowing them to retain the collateral and catch up. Payment amounts are based on the debtor's current income.
In short, the answer to this question is that a person may file bankruptcy as many times as they wish throughout their lifetime. The only stipulation to this statement would be that any bankruptcy filing will depend on eligibility for filing under a given chapter. For example, under the United States Bankruptcy Code, an individual is ineligible to file under Chapter 13 if they have unsecured debt that exceeds a total of $394,725 or secured debt that exceeds a total of $1,184,200. In these cases, a party would need to file under a different Chapter.
Lehighton residents who are struggling to pay their bills can feel overwhelmed and frustrated. Just when you think you're doing OK, another bill arrives and you're behind again. Or an unexpected expense pops up, like medical bills or a car needs to be fixed. Regardless of how a person got to this situation, when a house is at risk of foreclosure, Chapter 13 bankruptcy protection may be able to help.
The main purpose of a Chapter 13 bankruptcy is to consolidate debt and stop foreclosure or repossession. Even though a Chapter 13 plan extends payments over a longer period of time, a creditor cannot legally pursue collections on any account that is included in an active bankruptcy. These plans are intended to include past due payment amounts along with ongoing payments, thereby allowing a debtor additional time to bring an account back to current status.
The prospect of losing a family home is understandingly alarming and upsetting. As a result, it is important for those struggling with financial challenges to be aware of the personal bankruptcy options available to protect them. Personal bankruptcy options may be able to help protect a family home and may also help with foreclosure. The Chapter 13 bankruptcy process may help stop foreclosure which is why it is an option that is important to understand.
There are a few distinctions between Chapter 13 bankruptcy and Chapter 7 bankruptcy that should be taken under consideration when you are deciding if either are right for you. Chapter 7 bankruptcy is considered liquidation bankruptcy, while Chapter 13 bankruptcy is "reorganization" bankruptcy. This distinction generally means that with Chapter 7 bankruptcy, one must turn over non-exempt property that you own. For Chapter 13 bankruptcy, you are setting a repayment plan based on your earnings, and you get to keep the property that you own. There are a few qualifying factors that you must fall within in order to qualify for Chapter 13 bankruptcy, however.
One of the potential advantages that Chapter 13 bankruptcy has over Chapter 7 bankruptcy is that it does not require the debtor to sell off or liquidate all of his assets in order to satisfy his creditors and complete his bankruptcy discharge. Rather, a Pennsylvania debtor who chooses to use Chapter 13 bankruptcy to find a fresh financial start may set up a repayment plan that provides his secured and unsecured creditors with payments toward the money they are owed. This post will generally discuss the Chapter 13 repayment plan; readers who would like to learn how they may benefit from Chapter 13 bankruptcy and its various protections are encouraged to speak with their own attorneys. This post is not intended to serve as legal advice.