Bankruptcy: An Overview of Chapter 13 (Part A)
If you are currently faced with overwhelming debt, then in the United States you have the legal option of filing for bankruptcy protection. If you do choose to file for bankruptcy in Maryland, then one of the options that you may choose is called chapter 13 bankruptcy. Chapter 13 bankruptcy enables you to develop a plan to repay your debts, while preventing creditors from harassing you and placing liens on your personal property.
To file for bankruptcy in Maryland, you can get the professional help of a Maryland bankruptcy attorney.
What is chapter 13 bankruptcy in Maryland?
Chapter 13 bankruptcy is also known as “a wage earner’s plan”. It allows individuals who have a regular income to repay all or part of their debts. Under this plan, debtors will propose a plan to make payments in installments, which can be spread over a period of 3 – 5 years. The length of time will depend on the debtor’s current monthly income. But in no case may a plan require payments for more than a 5 year period. During this time the law forbids creditors to make collection efforts.
What are the advantages of chapter 13 bankruptcy in Maryland?
Unlike chapter 7 bankruptcy, chapter 13 does not require you to liquidate your assets. Therefore, you can save your home from foreclosure, and put a stop to any foreclosure proceedings. However, you will still be required to make the necessary payments under your bankruptcy repayment plan.
Furthermore, chapter 13 allows you reschedule any of your secured debts (other than a mortgage for your primary residence), which may lower your monthly payments. It also acts as a consolidation plan, so that you can make your payments to a trustee, who then distributes the money to creditors. In fact, you will have no direct contact with any of your creditors while under chapter 13 bankruptcy protection.
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Related posts:
- Reasons to Use Chapter 13 Bankruptcy Instead of Chapter 7 Bankruptcy
- Bankruptcy: An Overview of Chapter 13 (Part B)
- How Bankruptcy Can Help With Foreclosure
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[...] If you have insurmountable debts and are considering Chapter 13 bankruptcy protection, you may want to know what the process involves. To learn more, read our article Bankruptcy: An Overview of Chapter 13 [...]