Chapter 13 Bankruptcy

Chapter 13 Bankruptcy

The Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005 was one of the more significant legislative changes to personal finance passed by the United States Congress in recent history. It made sweeping changes to American bankruptcy laws, affecting both consumer and business bankruptcies. Many of the bill’s provisions were explicitly designed to make it “more difficult for people to file for bankruptcy.

The BAPCPA was intended to make it more difficult for debtors to file a Chapter 7 Bankruptcy—under which most debts are forgiven—and instead required them to file a Chapter 13 Bankruptcy, under which their debts are discharged only after the debtor has repaid some portion of these debts.


About the Process

Chapter 13 is also referred to as reorganization bankruptcy. Rather than selling off your assets to repay creditors as in Chapter 7, a repayment plan is established through the bankruptcy court, which enables you to gradually get rid of your debt and retain many of your assets. The debt is “reorganized” so that you only need to make one monthly payment and after three to five years, any remaining debt is discharged.

Only an individual can file for Chapter 13, so if you are a sole proprietor of a business in trouble, a bankruptcy attorney at the firm should be consulted to help answer your questions and determine if this is the correct step for you. He can ensure your rights and financial interests are protected and inform you if you are qualified for bankruptcy.

Filing a Petition

Filing a petition with bankruptcy court begins the process. This petition must be filed with a great deal of documentation concerning your income, assets and liabilities, current expenditures and evidence of payment from employers, to name but a few. It is essential, for a smooth proceeding, that every document required is accurate and complete or it can add time to the process and possibly even prevent you from getting the result you desire. An experienced and proficient legal representative will help ensure that this does not happen. A trustee will be appointed to your case and is the person who will evaluate your case and, when your payment plan is approved, the trustee will act to collect your monthly payment and disburse it to your creditors.

If you have been struggling with overwhelming debt and harassing creditors you are in need of some relief. If you have assets that you don’t wish to lose, Chapter 13 may be a viable option for you. You have legal options and it is important that you become informed of them. A trusted legal representative from the firm is interested in preserving your financial interests and will guide you through your options and assist you to make knowledgeable decisions about what steps to take to resolve your financial problems. Contact The Parke Law Group for more information.