A bankruptcy filing under Chapter 13, which is sometimes called Reorganization Bankruptcy, refers to applying for the court’s intervention in reorganizing the assets and liabilities of an individual or married couple. So, when the Court receives an application under Chapter 13 of the Bankruptcy Code, it helps the applicant restructure their debts and assets.
The unique thing about filing for Chapter 13 bankruptcy is that you do not lose any of your property while the court proceedings are carried out.
Filing Bankruptcy under Chapter 13
First, you can propose a reorganization plan, detailing how you intend to pay your debt and how much. A court-appointed trustee will go over your plan and make sure you are giving the most you can to satisfy your creditors.
When you file your petition with the court, an automatic stay will immediately go into place preventing any collections acts against you. This stops foreclosures, evictions, repossessions, utility shut-offs, wage garnishments, as well as phone calls and emails attempting to reach you.
Trustee
If the trustee and court approve your plan you will begin to make monthly payments into the courts and the funds will be distributed to your creditors. These repayment plans can last from three to five years. At the end of that time, any remaining unsecured debt will be discharged. If you wish to keep your home and your car, you will need to continue to make those payments.
If you would like to know more about how bankruptcy can relieve the stress of overwhelming debt, contact a Hidalgo County bankruptcy attorney.