If you are a home owner whose property is under threat of foreclosure due to non-payment of debts, or if your personal possessions are about to be repossessed for non-payment, you may want to consider chapter 13 bankruptcy rules. Filing for bankruptcy under chapter 13 has been a boon for many debtors because of the innate protection it provides to debtors against foreclosure or repossessing processes regardless of whether they are already initiated or in the pipeline.
Chapter 13 bankruptcy is also increasingly being seen as a viable option by creditors who are assured that at least a fair portion of their loan may be repaid, depending on the capacity of the debtor to repay over a period of time.
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The first thing that you need to know about chapter 13 bankruptcy rules is that there is an automatic stay that is in place when you file for bankruptcy - your creditors can no longer hound you to repay. The court appoints a trustee who will deal with your creditors in consultation with your attorney.
Your bankruptcy lawyer can represent you in negotiations with your creditors in order to decide a just repayment plan. It is important for you to discuss your financial situation with your bankruptcy lawyer before hand as it will help the trustee decide a fair repayment plan to pay off your creditors within 3-5 years.
Once you file for bankruptcy, according to chapter 13 bankruptcy rules, you will need to make payment to the trustee at monthly intervals, with the first payment due a month after filing. The trustee is responsible for making payments to your creditors on your behalf. Until a repayment plan is approved by the courts, the trustee will hold the accrued payment in readiness for repayment. The trustee usually gets a percentage of the amount repaid, so you may need to discuss this with your creditors in case they are not willing to overlook this and want you to make the payment in full to them.
Chapter 13 bankruptcy rules accord priority to secured debts such as mortgages and creditors with priority such as child support payments and the IRS. Unsecured debts are repaid last, and there is a good chance that such debts may not be repaid at all or may be paid towards the end of the repayment period. In case, your unsecured debt is sold to a debt collection agency.
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