Being so much in debt that repaying your debts becomes well almost impossible is something that many people find them facing and which leaves them with no alternative but to file bankruptcy in order to get their financial situation back on track. However, as good as it may seem that filing bankruptcy will help you out of such financial mess, it can also lead to much confusion in your mind trying to figure out what is Chapter thirteen bankruptcy and how does it differ from chapter seven bankruptcy. First thing to remember when filing bankruptcy is that is now no longer a state matter its now a federal matter. If you have creditors going after you this will all go away when the bankruptcy is file all you have to do is giving them a bankruptcy filling number and by law they have to stop calling you and start talking to the bankruptcy courts.
Understand What Bankruptcy Is However, before looking at what Chapter 13 bankruptcy is, it would be necessary to first understand the meaning of bankruptcy itself. Bankruptcy is a legal process filed in a law court with the intention of eliminating debts and provides the individual or business that is filing bankruptcy with relief from having to pay off the debts, and thus can make a new start in life. Chapter 13 bankruptcy may cost you about one hundred and eighty-five dollars to file and it is commonly also referred to as reorganization bankruptcy and such a form of bankruptcy is generally filed by persons that wish to eliminate their debts in three to five year's time. Under Chapter 13 bankruptcy, individuals can keep part of their possessions and also have a means to finance some of their day to day expenses while at the same time still have some money left over to pay off their debts.
If you want to pay off your chapter 13 bankruptcy early there are a few things that you need to know. First the question will come to you of how did you get money to do this, second make sure that this money where disclosed in the Chapter 13 when first filling the papers. Makes sure its not an income that you forgot to disclose.
If its not then go ahead an pay off your Chapter 13 early. So, when you decide on filing Chapter 13 bankruptcy, you will need to present your petition for bankruptcy in which you need to list your schedule of liabilities and also assets. And, following the filing of Chapter 13 bankruptcy, you need to provide a plan for repayment of debts which has already been reviewed by creditor's to see that it does indeed satisfies their requirements. Filing Chapter 13 bankruptcy is beneficial to you if you want to hold on to some possessions including your home, and in fact, filing for this kind of bankruptcy can, under certain circumstances, prevent foreclosure and such an instance is known as automatic stay which will give you time to catch up on your outstanding debts. It is only after you still cannot meet your debt obligations in the period of reorganization that your home will be foreclosed.
Jim Power is a writter for the consumer website http://www.lawyermemo.com where there is free lawyer advice for bankruptcy related topics. Please visit http://www.lawyermemo.com for more information