The chapter 13 rules of bankruptcy are complicated in nature but simple in practice. The chapter 13 bankruptcy rules were drastically changed upon the enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. With this new law a person filing for bankruptcy will have to clearly demonstrate an inability to payback their debts before a full discharge can be granted. If the person makes more than the required amount then they will not be able to file for chapter 7 bankruptcy and they will instead have to file for chapter 13 bankruptcy. With a chapter 7 filing a person can have all of their debts discharged and it is very rare that a person will have to make back payments on any of their credit accounts once the bankruptcy proceeding has become official.
This will depend on whether the individual passes what is called the chapter 7 means test, as this test is designed to take into consideration the person's income and debt level to see if they could eventually make any back payments for such debts. If the person does not pass the chapter 7 means test then they will not be able to file for chapter 7 and they will instead only be able to file for chapter 13 bankruptcy. Chapter 13 bankruptcy can still provide the debtor with tremendous relief from their past debts, and the major difference between chapter 13 and chapter 7 is the fact that the debtor will have to make back payments on a number of their past credit accounts, whereas no back payments are typically required with a chapter 7 bankruptcy.
How much they will have to pay, for how long, and to what accounts will be determined during the actual bankruptcy proceedings. It is fairly common to have to payback a portion of consumer accounts for about five years after the conclusion of the bankruptcy proceedings. After five years the majority of accounts that were included in the bankruptcy proceedings must be discharged and thus finalized in the eyes of the bankruptcy court. Chapter 13 becomes the only option for some people who make more than what is considered the minimum to pass the means test, and if you make more than your state's median in terms of income for an average household then you are going to have difficulty qualifying for a chapter 7 filing and you will probably be regulated to filing for a chapter 13 proceeding. This isn't necessarily a bad thing, although most people would most likely prefer a complete discharge than to have to wait for five years after having to make back payments on those accounts.
Before you file a bankruptcy petition in your area it is vital that you speak to a qualified professional that can provide you with some advice and guidance on whether you may qualify for chapter 7 or chapter 13. There is no shortage of good bankruptcy lawyers out there, and it is vital that you contact a lawyer that you feel comfortable working with so that you can take advantage of all their years of experience and knowledge. Going ahead with a bankruptcy filing is not the smartest thing to do by yourself, and by hiring an attorney you will be giving yourself the best opportunity to come out a winner at the other end, so go online and begin looking for a good bankruptcy lawyer. The chapter 13 rules of bankruptcy cannot be fully interpreted by a laymen, and to get the full benefit of filing for bankruptcy you must hire an attorney that can translate these chapter 13 rules so you can understand your own particular situation. By doing so you will then know how to proceed with each step of the process, and ultimately this will give you the edge in getting a successfully bankruptcy decision that can provide you relief from your debts.
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