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Chapter 13 Bankruptcy Essay

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Bankruptcy
Bankruptcy is a legal way in which a business is liquidated in an event where the business is unable to pay it's debts from its current assets. Hence bankruptcy makes it possible for businesses, individuals and couples that cannot pay up their debts be exempted from repaying part of the debt or all of the debt. There are rules, laws and procedures for filling bankruptcy, in the united states it is governed by the federal law, states are not allowed in legislating in this aspect of law.
However there are two parties involved in bankruptcy filling namely the debtor and creditor, the debtor is party who incurred the debt or the party that owes money to the creditor, while on the other hand the creditor …show more content…

Prevent foreclosure, it saves debtors homes from foreclosure.
Allows the debtor to make monthly payment based or his budget for the month. Hence chapter 13 is flexible because it allow individual to pay what they can afford.
Credit report is shown for seven years.
Payment term is extendable under chapter 13
It gives provision whereby interest rates on a particular loan can be reduced
Chapter 13 can be filled as soon as chapter 7 is fully discharged
It protects third parties (co-signers)

Disadvantages of chapter 13 bankruptcy

Chapter 13 bankruptcy will be displayed on your credit report for seven years
Legal fees could be expensive
Lending huge sum of money will not be easy because creditors is likely to question your credibility.

Who Can File for Chapter 13
Bankruptcy?
For a debtor to be able to file for chapter 13 bankruptcy he or she must meet up to chapter 13 bankruptcy. According to the chapter 13 bankruptcy code a debtor must meet the following requirement to be eligible.
You are not a business entity.
You are not barred by a prior bankruptcy.
A previous bankruptcy case was not dismissed within the last 180 days.
You debts are not too

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