On behalf of Law Offices of Mark M. Kratter, LLC on August 07, 2012
Connecticut residents faced with debt have the option of bankruptcy available to them. Several types of bankruptcy exist, so it is important to become familiar with the type that is most suited to one's unique situation. Many people are familiar with Chapter 13, but may not know the specific details about it.
Chapter 13 bankruptcy allows the debtor to outline a repayment plan for their debt. The payment plan can last three years or occasionally five when permission is received. The debtor continues to make monthly payments, and the creditor is barred from making collection efforts within the window of the repayment plan.
If the individual meets the terms of their repayment plan, many of their debts will be discharged. However, it is important to know that debtors are still required to make their regular payments in addition to their payment plan payments. Another important aspect of Chapter 13 is that individuals, married couples or those who are self-employed can apply but there is a debt ceiling to qualify. Anyone seeking this type of bankruptcy must have less than $360,475 in unsecured debts and less than $1,081,400 in secured debts.
In Chapter 13, certain debts such as child support, alimony, taxes and student loans will not be discharged, and the debtor remains responsible for them even after the bankruptcy. However, Connecticut residents seeking this type of bankruptcy are likely faced with overwhelming debts, so any type of relief would likely be helpful. For some people, Chapter 13 may be appropriate, but others may be better-suited for Chapter 7 depending upon their unique financial situation. Speaking to an experienced bankruptcy attorney may be helpful in determining which approach is right for you.
Source: The Quincy Cove, "Bankruptcy laws: What is chapter 13 bankruptcy?" July 27, 2012
