This article is intended to provide some general bankruptcy information and is certainly not intended to replace the tailored information a debtor will receive from an attorney. Bankruptcy is governed by Federal Law (Title 11 of the US Code separated into individual Chapters, each dealing with a different type of bankruptcy) but the bankruptcy laws of each state also play an important part; consequently, though there are bankruptcy kits, you will probably need a lawyer to successfully file and a lawyer search should focus on a bankruptcy attorney or bankruptcy law firm licensed in the debtor’s state of residence. The attorney licensed in your state can tell you how to file for bankruptcy in a federal court within your
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Only debtors with regular income and with debts under certain limits can use Chapter 13 bankruptcy. The debtor proposes a payment plan, his/her creditors have no say in the plan except to object for limited reasons and if the court allows the repayment plan, the debtor and all creditors are bound by the plan. The amount and duration of payment depend on many factors including the value of property, the amount of income and the amount of expenses. The payments are usually made to the court-appointed trustee, who pays the creditors according to the plan. After the debtor makes all payments according to the plan, the court will discharge the debts. However, if the debtor does not make the payments or does not obtain court approval of a modified plan, the trustee will move to dismiss the case and the court will usually dismiss it, leaving the creditors free to resume all collection remedies for the unpaid debts. The rule of thumb is that Chapter 13 bankruptcy can be granted every 6 years but the time limit is affected by other factors, so a debtor should definitely consult an attorney about his/her circumstances.
* CHAPTER 11: also called “Reorganization,” In Chapter