| If you file a chapter 13 bankruptcy, you are agreeing to pay your debts back at a monthly amount which will be determined by a trustee that has been appointed to you by the bankruptcy court. You will need to see a lawyer that practices bankruptcy law. The difference between a chapter 7 and a chapter 13 bankruptcy is the amount of debt that you owe and your ability to repay the debts. If your income is too high and the amount of debt you have is high (but not high enough) to qualify for chapter 7 then, if you decide to file, it will have to be a chapter 13 bankruptcy. You will have to prove income, debts and reveal all your financial assets. You will keep what you own and continue to pay a set amount monthly. This is usually for a period of 5 to 7 years. You will not be able to buy or sell anything without the permission of the trustee appointed to your case. Any income tax or other monies that you are entitled to will be taken to pay towards your debts. Many people decide to deal with the creditors themselves and try to work out a payment that satisfies everyone, rather than lock themselves into a 5 to 7 year time frame where they have to have someone's permission to buy or sell anything. Explore your options before you commit to filing bankruptcy in any form. It basically ruins your credit for a period of up to 10 years, and limits your ability to purchase things like a car or a home. |
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