Read the latest Bankruptcy FAQs from Higgins and Associates
How does filing under chapter 13 affect collection proceedings and foreclosures previously filed against the debtor?
The filing of a chapter 13 case automatically stays (stops) an lawsuits, attachments, garnishments, foreclosures, and other actions by creditors against the debtor or the debtor’s property. A few days after the case is filed, the court will mail a notice to all...
What is a chapter 13 discharge?
It is a court order releasing a debtor from all dischargeable debts and ordering creditors not to collect them from the debtor. A debt that is discharged is one that the debtor is released from and does not have to pay. There are two types of chapter 13 discharges: a...
Will a person lose any property if he or she files under chapter 13?
Usually not under chapter 13. Creditors are usually paid out of the debtor’s income and not from the debtor’s property. However, if a debtor has valuable nonexempt property and has insufficient income to pay enough to creditors to satisfy the court, some of the...
How does chapter 13 differ from a private debt consolidation service?
In a chapter 13 case, the bankruptcy court can provide aid to the debtor that private debt consolidation services cannot provide. For example, the court has the authority to prohibit creditors from attaching or foreclosing on the debtor's property, to force unsecured...
What fees are charged in a chapter 13 case?
There is a $185 filing fee charged when the case is filed, which may be paid in installments if necessary. In addition, the chapter 13 trustee assesses a fee of 10 percent on all payments made under the plan. Thus, if a debtor pays a total of $5,000 under a chapter 13...
When is chapter 13 preferable to chapter 7 for a debtor?
Chapter 13 is usually preferable for a person who: wishes to repay all or most of his or her unsecured debts and has the income with which to do so within a reasonable time, has valuable nonexempt property or has valuable exempt property securing debts, either of...
Where is a chapter 13 case filed?
A chapter 13 case is filed in the bankruptcy court in the district where the debtor has lived or maintained a principal place of business for the greatest portion of the last 180 days. The bankruptcy court is a unit of the federal district court.
How does chapter 13 differ from chapter 7 for a debtor?
The basic difference between chapter 7 and chapter 13 is that under chapter 7 the debtor’s nonexempt property (if any exists) is liquidated to pay as much as possible of the debtor’s debts, while in most chapter 13 cases a portion of the debtor’s future income is used...
What is chapter 13 and how does it work?
Chapter 13 is that part (or chapter) of the Bankruptcy code under which a person may repay all or a portion of his or her debts under the supervision and protection of the bankruptcy court. The Bankruptcy Code is that portion of the federal laws that deal with...
How can a debtor minimize the amount of money or property that must be turned over to the trustee in a chapter 7 case?
In a chapter 7 case the debtor is required to turn over to the trustee only the nonexempt money or property that he or she possessed at the time the case was filed. Many nonexempt assets of consumer debtors are liquid in nature and tend to vary in size or amount...
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