A chapter 13 bankruptcy enables individuals with regular income to develop a plan to repay all or part of their debts. Under this chapter, debtors propose a #repayment plan to make installments to creditors over three to five years. During this time the law forbids creditors from starting or continuing collection efforts.

Advantages of Chapter 13: Chapter 13 bankruptcy is a #debt #consolidation and #repayment plan that lasts 35 years. The length of the payment plan can be discouraging for some people and Chapter 7 bankruptcy may seem initially more preferable. However, Chapter 13 has many advantages, including some that are not available in a Chapter 7, and it may be the best solution for your long term financial health.

Some of the advantages of a Chapter 13 bankruptcy include:
allowing you to pay what you can afford,
discharging debts you do not pay in full,
saving your home from foreclosure, and
removing a 2nd or 3rd mortgage ("lien stripping").

Chapter 13 allows you to make one monthly payment to a bankruptcy trustee that covers all of your debts. Your payment is determined by your budget, which you put together with your bankruptcy attorney for approval by the Bankruptcy Court. Your budget allows you to pay what you can afford.

How Chapter 13 Works: When an individual files a chapter 13 petition, an impartial trustee is appointed to administer the case. The chapter 13 trustee both evaluates the case and serves as a disbursing agent, collecting payments from the debtor and making distributions to creditors.

Filing the petition under chapter 13 "automatically stays" (stops) most collection actions against the debtor or the debtor's property.

Chapter 13 also contains a special automatic stay provision that protects codebtors. Unless the bankruptcy court authorizes otherwise, a creditor may not seek to collect a "consumer debt" from any individual who is liable along with the debtor. Consumer debts are those incurred by an individual primarily for a personal, family, or household purpose.

Between 21 and 50 days after the debtor files the chapter 13 petition, the chapter 13 trustee will hold a meeting of creditors. During this meeting, the trustee places the debtor under oath, and both the trustee and creditors may ask questions. The debtor must attend the meeting and answer questions regarding his or her financial affairs and the proposed terms of the plan.

At the end of the 341 hearing the trustee will announce their objections so that the debtor and their attorney know what needs to be resolved before the confirmation hearing.

No later than 45 days after the meeting of creditors, the bankruptcy judge must hold a confirmation hearing and decide whether the plan is feasible and meets the standards for confirmation set forth in the Bankruptcy Code. Creditors will receive 28 days' notice of the hearing and may object to confirmation. 

If the court confirms the plan, the chapter 13 trustee will distribute funds received under the plan.  If the court declines to confirm the plan or the modified plan and instead dismisses the case, the court may authorize the trustee to keep some funds for costs, but the trustee must return all remaining funds to the debtor (other than funds already disbursed or due to creditors). 

Making the Plan Work: The provisions of a confirmed plan bind the debtor and each creditor. Once the court confirms the plan, the debtor must make the plan succeed. The debtor must make regular payments to the trustee either directly or through payroll deduction, which will require adjustment to living on a fixed budget for a prolonged period.

A debtor may make plan payments through payroll deductions.I f the debtor fails to make the payments due under the confirmed plan, the court may dismiss the case or convert it to a liquidation case under chapter 7 of the Bankruptcy Code.

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Saedi Law Group are experienced Atlanta bankruptcy lawyers who have been helping Georgians file for bankruptcy for over 19 years. We have filed thousands of bankruptcy cases here in Georgia and are in court every day fighting for our client's rights against creditors.

Our team is passionate about our work and we take it very seriously. It is a privilege to help clients and their families in times like these. Bankruptcy was created for this purpose. Please contact us today at (404) 9197296 or [email protected] to learn about what you can do to protect your future. #bankruptcy #lawyer #attorney #Georgia #Atlanta #lawgirlboss #chapter13 #chapter7