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When individuals are having financial problems, it can seem as though there is no solution to the problem. However, Chapter 13 bankruptcy is a solution that can answer the problem. For some, bankruptcy means that all personal assets are sold to pay the debts. This is not the case with a Chapter 13 bankruptcy. With this type of bankruptcy, applicants are put on a payment plan for several years to satisfy debt.

There are two major requirements for this form of bankruptcy. Any individual with unsecured debt that is less than $383,175, and secured debt that is less than $1,149,525.11 is eligible for a Chapter 13 bankruptcy. Within 180 days of filing a bankruptcy petition, a petitioner should complete credit counseling from an approved credit counseling agency.

When individuals are having financial problems, it can seem as though there is no solution to the problem. However, Chapter 13 bankruptcy is a solution that can answer the problem. For some, bankruptcy means that all personal assets are sold to pay the debts. This is not the case with a Chapter 13 bankruptcy. With this type of bankruptcy, applicants are put on a payment plan for several years to satisfy debt.

There are two major requirements for this form of bankruptcy. Any individual with unsecured debt that is less than $383,175, and secured debt that is less than $1,149,525.11 is eligible for a Chapter 13 bankruptcy. Within 180 days of filing a bankruptcy petition, a petitioner should complete credit counseling from an approved credit counseling agency.

There are many advantages to Chapter 13 bankruptcy. For some, the most attractive advantage is that petitioners are not required to place their homes in foreclosure to satisfy their debts. In fact, a Chapter 13 bankruptcy can stop an existing foreclosure proceeding. Another advantage of a Chapter 13 bankruptcy is that it enables petitioners to lower monthly payments on secured debt by extending repayment through the bankruptcy repayment period. The average period of repayment ranges from three to five years. Finally, petitioners are free from the harassing phone calls placed by creditors. All debts are consolidated into one loan and payments are made directly to the Chapter 13 bankruptcy trustee. No direct contact between creditor and debtor is required.

Bankruptcy is often painted with one brush when it is discussed in the media. Nonetheless, there are a variety of brushes or tools that can be used to help consumers manage debt. One such brush is Chapter 13 bankruptcy. Anyone considering this or any other type of bankruptcy should consult a bankruptcy attorney.

Source: UScourts.gov, “Chapter 13,” accessed on Sept. 8, 2014