Chapter 13 Bankruptcy
Our Boise Bankrutcy Lawyers regularly field calls about individual Chapter 7 Bankruptcy. This is probably the area of bankruptcy most recognized by the general public. However, you have undoubtedly seen the title Chapter 13 as a type of debt relief action.
So what is Chapter 13 Bankruptcy? As always, the "Chapter" referred to in Bankruptcy Law has to do with the location of the Code Section in the Federal Bankruptcy Law. Chapter 13 is a form of individual bankruptcy (not for businesses or legal entities such as corporations). Whereas Chapter 7 allows an individual to discharge their debt, Chapter 13 essentially allows an individual to create a new payment plan. If, for example, you have a secured loan on a boat or your home and you are behind on these payments, instead of loosing the property and discharging the debt Chapter 13 bankruptcy allows you to cure any default, reamortize and set up a new payment plan.
Why would an individual choose Chapter 13 Bankruptcy over Chapter 7? To qualify for Chapter 7 you must meet an income test. If you have income that exceeds the income threshold (basically you have money left over and that can be imputed to you after considering your income exemptions and after paying your monthly bills) you will not qualify for Chapter 7. Chapter 13 lets individuals struggling with debt, despite having adequate income, to get back on their feet by creating a payment plan that works for them.
If you are considering Bankruptcy and need a Boise Bankruptcy Attorney who can help you get out of debt quick, give us a call (208) 472-2383, and see what we can do for you.
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