Chapter 13


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Chapter 13

A section of the U.S. Bankruptcy Code that deals with reorganization of debt of wage-earning individuals, including the opportunity to save their homes from foreclosure.

Chapter 13

A form of bankruptcy in which a person or company reorganizes his/her/its debts so they are repaid over a period of three to five years. This form of bankruptcy is most commonly used if one continues to have significant income even though one's debts have become too burdensome. A disadvantage to Chapter 13 is the fact that one's debts are not discharged. However, Chapter 13 may allow one to maintain ownership of assets that would otherwise be liquidated. It is also called a wage earner plan. See also: Chapter 7, Chapter 11, Best interests of creditors test.
References in classic literature ?
In chapter 13, verse 18, of the Apocalypse, it is said:
James Leduc Screenprinting, dab JBL Screenprinting, Rochester, filed March 4, Chapter 13.
Now in its twelfth updated edition, Chapter 13 Bankruptcy is the definitive guide to the legal proceedings of chapter 13 bankruptcy in America, written especially for lay readers who may be confronting difficult financial decisions.
is now helping clients to gain a greater understanding of the chapter 13 filing process.
Since the bankruptcy law was amended in 2005, however, many individuals have been channeled to Chapter 13, under which a debtor typically pays off a greater amount of debt through a court-approved repayment plan.
Chapter 13 filings also dropped in Massachusetts and Worcester County last year.
WHEN ALPHONZO KERSHAW FELL BEHIND ON THE mortgage of a second home last year, he filed for Chapter 13 bankruptcy, which would prevent a foreclosure and enable him to pay back more than $40,000 in past due mortgage payments and real estate taxes over a five-year period.
Homeowners threatened with foreclosure and individuals and families stressed with creditor harassment continue to consider Chapter 7 and Chapter 13 as options.
But many, particularly those in black communities, have been filing Chapter 13 bankruptcy, which carries a high risk of failure, leaving themselves vulnerable to end up with yet another mountain of debt, instead of a fresh start.
In a volatile economy, people increasingly rely upon student loans to pay for higher education, and, accordingly, questions related to the discharge of those loans under Chapter 13 decisions become more pertinent.
1) The amendments thus deny some debtors Chapter 7's immediate and almost automatic (2) cancellation of debts, and instead thrust them into a Chapter 13 that requires the debtor to make exacting payments to creditors over a period of up to five years.