Can’t Pay All Debts?
You cannot secure yourself against all risks, especially if it concerns your own business. If suddenly your company went to the wall, do not be upset as you have an alternative – Chapter 13. It is a plan of repayment in other words a protection of bankruptcy laws.
Chapter 13 bankruptcy law is a bankruptcy law with the help of which a company or an individual can file a petition under the court protection. According to Chapter 13 individuals and companies have to make repayments from their monthly earnings in installments. The court defines the terms within which a debtor has to repay the settled amount to the creditors. Generally, the period of repayment is five years.
Those who have a stable income, but have current debts, can also file bankruptcy under this law. Chapter 13 is more preferable than Chapter 7 law, as you do not have to provide any asset. Thus, you can keep your house or a car, even though you are going to pay from your monthly salary.
The debtor has to decide on the method of repayment. In other words he has to provide the repayment details whether he will be paying with the entire net income or on basic needs. As for basic needs the court defines the amount of repayments. If some of the debts are not repaid, then within a certain period of time the debtor has to make repayments.
An individual meets with the trustee in order to provide him with the details of income and proposed plan according to which you are going to pay money back to the creditors. The task of the trustee is to define whether you will be able to meet all requirements or not within a specific period of time. But it may happen so that the creditor can raise objections to the plan of the individual before the court or even before the meeting with the trustees.
They have the right to file their suit within 90 days. The debtor can start making payments 30 days after filing the claim. The attorney has to take care of all the details. It means that all payment should be made on time without any miss, also even current payment should be repaid in order to avoid leaving the case pending.
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