Rules for Filing Chapter 13

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The rules for filing Chapter 13 bankruptcy include allowing individuals the opportunity to repay debt over a period of three to five years, stopping foreclosure procedures and protecting co-signers from credit problems. Reschedule secure debts when filing Chapter 13 bankruptcy with information from a certified public accountant and personal financial planner in this free video on bankruptcy.

Part of the Video Series: Tax Law, Real Estate & Credit Tips
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Video Transcript

Hi, my name is Miranda Chook, a CPA. Chapter 13 bankruptcy refers to a section of the U.S. Bankruptcy Code that prescribes a process for restructuring debts, and this is only available to individuals. The primary purpose is to give individuals with monthly income an opportunity to develop a plan to repay all or part of their debts over time. Depending on the state and the amount of your regular monthly income you'll have between three to five years to repay your debts. Now, one thing that this will do is stop any foreclosure proceedings; however, you're still liable for the mortgage. Another or an advantage of this as well is that for other secured debts you may be able to reschedule the debts over a longer period of time, so that will result in lower monthly payments. Another reason why people choose this form of bankruptcy is that there may be some protection for co-signers. Depending on the state, and the amount of your regular monthly income you'll have between three to five years to repay your debts. During this time collection efforts are prohibited from being from starting or from continuing. One of the advantages of filing for this type of bankruptcy is that it will stop foreclosure proceedings; however, you're still going to be liable for the mortgage. Another reason why people file for this type of bankruptcy is that your other secure debts can be rescheduled for payment over a longer period of time which will result in lower monthly payments. Finally, another reason that people sometimes go this route is that it it offers some protection to co-signers.

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