Chapter 13 bankruptcy, also known as wage earner bankruptcy or reorganization bankruptcy, is a court-supervised process in which a debtor’s assets are reorganized to repay as much of his debt as possible. In addition, a monthly repayment plan is constructed to pay back the rest of the monies owed.Because a chapter 13 bankruptcy or reorganization bankruptcy is founded on the fact that the debtor has sufficient disposable income to support this repayment plan, the debtor is usually allowed to keep some assets, like his home, if his disposable income permits him to make the payments necessary for the mortgage as well as the remaining debt.It is evident that a chapter 13 bankruptcy is a highly complex legal procedure that is best navigated with the assistance of an experienced chapter 13 bankruptcy lawyer in order to successfully attain a notice of discharge. Chapter 13 of the United States Bankruptcy Code describes the federal laws that govern chapter 13 bankruptcy, but the individual states have their own specific regulations for chapter 13 bankruptcy as well.These state-specific regulations define in the first place the minimum income required in order to qualify for chapter 13 bankruptcy. Because the costs of living vary widely from state to state, these income requirements vary significantly as well. Besides this, each state defines which of a debtor’s assets are exempt from the chapter 13 bankruptcy proceedings.In some states, a debtor’s house and car all always exempt from a chapter 13 bankruptcy, while in others they are not.To apply for chapter 13 bankruptcy you’ll have to file your chapter 13 bankruptcy petition with the bankruptcy court. This petition contains all information about your financial state of affairs, as well as your proposal for your repayment plan. In addition, you will have to include proof of credit counseling and the results of the means test. If the chapter 13 bankruptcy petition is complete, the court will accept it and appoint a trustee to oversee your chapter 13 bankruptcy.The trustee will review your petition and your repayment plan, and will be present at all court hearings, such as the meeting of creditors. Certain debts may be discharged, while others may be paid off with available funds. If nobody objects to your chapter 13 bankruptcy, you will start making payments for the repayment plan, and upon completion, the bankruptcy judge will issue your official discharge.
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