Chapter 13, Title 11, United States Code, this section of bankruptcy refers to the way an individual person can choose to go through a reorganization that is lead by the federal bankruptcy court. The Bankruptcy Code says that the ultimate goal of Chapter 13 is to allow debtors who have a steady income to agree to a court supervised repayment plan. Individuals can only file Chapter 13 or Chapter 7, the choice is theirs which one would be more beneficially to them and their situations. With Chapter 7 they court liquidates the assets and pays the creditors and it is over but with Chapter 13, the courts give you between 3 and 5 years to repay the payment reorganization plan.

While the agreement says once a debtor has agreed to a Chapter 13, the creditor is not allowed to contact the debtor and try to collect money from them. The creditor has to collect through the courts. The debtor gets to keep their property and the creditors get less money than what they are owed. But that is why we claim bankruptcy if we could afford to pay the balance we would.

But there are downsides to filing for personal bankruptcy and one of those reasons is that the discharge of the bankruptcy stays on your record for 10 years. During the time when the case is awaiting a discharge you as the debtor cannot apply for any type of credit unless the Chapter 13 Trustee assigned to you gives you the OK. Once you do have the discharge you may find it hard pressed to find a credit card company or any such lending approval companies will want to take a chance on someone who just filed for Chapter 13 bankruptcy.

Some of the advantages of claiming Chapter 13 over Chapter 7 is that Chapter 13 stops foreclosures on properties and mortgages that have been accelerated were reinstated when the bankruptcy plan is completed. Another question some people have about bankruptcy is what can be claimed and what cannot be. We can help you get it straight. The dischargeable debts on Chapter 13 are personal loans, credit cards, repossession charges, auto accident claims, medical bills, judgments and tax penalties.

Things cannot be discharged are recent taxes, trust fund taxes, child or family support orders, criminal fines or restitutions, accidents that involved DWI or DUI and Student loans, as you can see there are many bills that will be allowed to be taken care of in the event of a bankruptcy. Sometimes things happen and you can get buried and that is why these laws exist.

But these laws are made for your protection as well as for the protection of the creditors, too many people will tell you they filed for bankruptcy because they overspent their means and with the old laws more people did it because they could get rid of their debts without repayment and they could keep separate what they wanted to keep in their bankruptcy cases, simply put it was way too easy.

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