Section 13 bankruptcy is otherwise called Wage Earner Plan or revamping bankruptcy. The bankruptcy according to this section of the bankruptcy code, is only inverse to what exactly occurs under part 7 bankruptcy. Part 7 bankruptcy is a liquidation cycle, where all the advantages of the account holder are auctions off by the trustee designated by the bankruptcy court, so as to settle their obligations. Then again, the section 13 bankruptcy is a redesign cycle, where the indebted person gets an opportunity to proceed with its current business, while taking care of the obligations at the same time, according to the breadwinner plan affirmed by the bankruptcy court.
Qualification rules for section 13 bankruptcy
The new bankruptcy laws have now made it obligatory for all the borrowers to finish a MEANS assessment, before declaring financial insolvency and it is the reports of the MEANS test that will choose whether you fit the bill for part 7 or section 13 bankruptcy. The primary target of the MEANS test is to make sense of your costs and pay. You have to make a presentation with respect to your pay and costs. The fundamental costs are deducted from your general ordinary salary, so as to discover, if the cash along these lines left can be utilized to settle the obligations. On the off chance that the cash in this manner left is more than the middle pay of your state, you can fit the bill for section 13 bankruptcy. Else, you will be asked by the bankruptcy court to petition for section 7 bankruptcy.
You don’t have to pay everything of obligation
Under part 13 bankruptcy, you shouldn’t take care of everything of the obligation that you owe to your different leasers. You can move away by paying only a specific level of everything. This will rely on the aggregate sum of obligation that you owe and the aggregate sum of cash left to you, in the wake of deducting all the basic costs. For instance, you might be asked by the bankruptcy court to pay just 75 pennies on every dollar or might be 25 pennies for each dollar.
Obligation reimbursement plan
The indebted individuals that have been proclaimed bankrupt under part 13 bankruptcy are proposed an obligation reimbursement plan. You should reimburse the decreased cases of the loan bosses dependent on the reimbursement plan as proposed by the bankruptcy court. According to this arrangement, the trustee will watch out for your business exercises and will ensure that you are taking care of the paid off past commitments on the fixed month to month plan, as controlled by the bankruptcy court.