Bankruptcy – Chapter – 13

While the goal of chapter – 7 of the US bankruptcy law is to provide effective and immediate relief to the debtor from oppressive debts, the goal of chapter – 13 of the US bankruptcy law is to provide a systematic plan to the petitioner, to pay off his / her debt. The whole process of repayment of the debt is supervised by the bankruptcy court, with which the petition has been filed.

This chapter of the US bankruptcy law, that constitutes, title-11 of the US code, is best suited for persons with restricted source of income, who cannot pay-off their debt immediately, but if given sufficient time they can pay off their debt in sustained manner.

This chapter of the US bankruptcy law provides systematic reorganization and repayment plan to it’s petitioner for unsecured debts of amounts less than $360,475.00 and secured debts less than $1,081,400.00, over a period of 3 years to 5 years. The limit set forth on the debt dealt with in chapter – 13 of the US bankruptcy law may be subject to change on the basis of annual cost of living and the debt limit cited above is calculated on the basis of values through 1st April 2010.
The time during which the petitioner repays the debt, the creditors cannot attempt to recover petitioner’s previously incurred debt from the petitioner, except with the intervention of the US bankruptcy court.
Thus in general, the petitioner is able to retain all his property and repay the debt over an extended period of time. This often results in the creditors, recieving lesser amount of money than the amount that the petitioner owes them. The bankruptcy case filed under chapter – 13 also prevent the creditors from collecting their owed money from co-debtors or co-signers who have not filed a case, separately for the same debt in question.