Chapter 13 Bankruptcy is usually referred to as a consumer reorganization and involves the payment of the consumer’s debt into a reorganization plan for a period of time not less than three (3) years and not greater than five (5) years. Disposable income is defined as the income available after a debtor meets the needs of their household. Debtors in Chapter 13 can accomplish certain goals that they cannot accomplish in Chapter 7. Debtors can put a stop to a foreclosure or repossession of property in a Chapter 13 if they can present a plan that will repay a creditor. In Chapter 13 you can stop a mortgage foreclosure or a repossession if you can present a plan that will repay any arrears at the time of the filing of your petition in bankruptcy. In this way you can stay in your home or retain a motor vehicle. Also, with certain property that is subject to a lien, mortgage or security interest, you can force the creditor to accept the fair market value of property as opposed to the loan amount which is often greater than the value of the property. Also, there are circumstances where you can remove a second mortgage from your property.
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