How Chapter 13 Works

You are buried in debt and need to find a way to get out. You have heard about filing bankruptcy, but you just are not sure about it. Knowing what all the details about your options would enable you to make a decision.

One type of bankruptcy, the only one we are going to discuss here, is Allentown PA chapter 13 bankruptcy. This is an option available to individuals. If you want to get out of debt without having to sell off your belongings, this would be your option. The repayment plan is entirely dependent on your income.

The eligibility for this plan is a little strict. You must be an individual, this can include having a business that is unincorporated or being self-employed. Next, you have to be below a certain amount in secured and unsecured debts. At this time the maximum level of debt is $360,475 for unsecured and $1,081,400 of secured debt. You also cannot have applied for bankruptcy within the last 180 days.

You have to go to a court hearing to file any type of bankruptcy. At the hearing you will need to bring all the information on your debts, your income statements, a list of your property, and your monthly expenses. A court appointed trustee will go over all the information on your case and talk with the court about your situation.

If your bankruptcy is approved, then a payment plan will be given to you by the court. The trustee will continue to work with you until your payment plan has ended. If you need more time to make a payment or your income has changed, you need to let your trustee or the court know. They can reevaluate your situation and decide if the plan needs to be changed.

This is also the only option between the two bankruptcies available for individuals that will allow you to keep your house. It can allow you to save your home from foreclosure because the bank is bound by the court’s repayment plan. In this way you can keep your home while still paying on it. Make sure that you make all your payments or contact the court if you have any problems, otherwise you could face huge penalties.

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