Listen up!


Some people may be wondering what to do when in debt because of identity theft , 

Though if you file and do not have to repay you can be audited by the irs. 

Becareful of the decision you make! 

Does not protect you from aggressive and angered debt agencies. May even attack you on a personal.


Chapter 13, Title 11, United States Code



Chapter 13 of the United States Bankruptcy Code, codified under Title 11 of the United States Code, governs a form of bankruptcy in the United States that allows individuals to undergo a financial reorganization supervised by a federal bankruptcy court. The goal of Chapter 13 is to enable income-receiving debtors a debtor rehabilitation provided they fulfill a court-approved plan. This is in contrast to the goals of Chapter 7, which offers immediate and complete relief of many oppressive debts. Chapter 13 is a form ofdebt consolidation.

Choice of chapterEdit

An individual who is badly in debt can file for bankruptcy either under Chapter 7(liquidation, or straight bankruptcy), under Chapter 13 (reorganization), Chapter 12(family farmer reorganization), or underChapter 11 (reorganization of a company, or an individual debtor whose unsecured debt exceeds $360,475.00 and/or whose secured debt exceeds $1,081,400.00).

Debtors may also be forced into bankruptcy by creditors in the case of an involuntary bankruptcy, but only under Chapters 7 or 11. However, in most instances the debtor may choose under which chapter to file. The debtor may also choose to convert to another chapter from a 7 or 11 when forced into aninvoluntary bankruptcy.

The debtor's financial characteristics and the type of relief sought plays a tremendous role in the choice of chapters. In some cases the debtor simply cannot file under Chapter 13, as he or she lacks the disposable incomenecessary to fund a viable Chapter 13 plan (see below). Furthermore, Section 109(e) of Title 11, United States Code sets forth debt limits for individuals to be eligible to file underChapter 13 the debt limits for filing Chapter 13 of unsecured debts of less than $360,475.00 and secured debts of less than $1,081,400.00. These debt limits are subject to annual cost of living increases and represent values updated through April 1, 2010.

Under Chapter 13, the debtor proposes a plan to pay his creditors over a 3-to-5 year period. This written plan details all of the transactions (and their durations) that will occur, and repayment according to the plan must begin within 30 to 45 days after the case has started. During this period, his creditors cannot attempt to collect on the individual's previously incurred debt except through the bankruptcy court. In general, the individual gets to keep his property, and his creditors end up with less money than they would, were the amount given to the debtor to continue collecting interest, allowing the debtor to find a way to pay the amount owed without losing their assets entirely.

Disadvantages

The disadvantage of filing for personal bankruptcy is that, under the Fair Credit Reporting Act, a record of this stays on the individual's credit report for up to 10 years. But you may obtain new debt or credit (credit cards, Auto, or consumer loans) after 12-24 months, and can get a new FHA mortgage loan 24 months after discharge and Fannie Mae and Freddie Mac loan after 36 months . but during the pendency of a Chapter 13 case the debtor is not permitted to obtain additional credit without the permission of the bankruptcy court. Moreover, creditors may not be willing to risk lending money to such an individual. However, this disadvantage is not unique to Chapter 13; it may also apply to individuals currently in a Chapter 11 case,Chapter 12 case or those who are in or have recently been in a Chapter 7 case.

Advantages

The advantages of Chapter 13 over Chapter 7 include the ability to: stop foreclosures although a foreclosure would be reinstated upon completion of the bankruptcy; achieve asuper discharge of debts of kinds not dischargeable under Chapter 7;[1] value collateral; bifurcate the security interest of creditors in certain property that creditors are either charging too much interest for, or are over-secured, or both, and leading to a cram down modification of the debt; prevent collection activities against non-filing co-signers (co-debtors) during the life of the case.

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