Chapter 13 Bankruptcy Fraud
If a person files for Chapter 13 bankruptcy, then they have the intention to repay the debts under better terms like reduced interest or lower monthly payments. Filing for Chapter 13 bankruptcy clause is allowed for a person who has a regular income. The whole idea behind processing this law is to allow the debtor to restructure his debts and pay off the creditors.
In order to facilitate the repayment, the court may direct the creditors to reduce the loan amount or the rate of interest. However, there is a ceiling for the debtor under this clause. That is the court allows a period of five years for the debtors to pay off the creditors. After that, the debtor will be under the vigilance of the court and an attorney will over all see through the proceedings.
This is beneficial for individuals because they can pay under a new interest plan that suits their pocket. The creditors will stop calling as long as they are receiving the payments. The repayment plan comes into effects within the next 45 days of filing for bankruptcy. This is the best option out for several salaried individuals who are unable to meet with their financial commitments in the present scenario.
However, the Chapter 13 bankruptcy clause is also being misused by many people. They are filing for bankruptcy showing their previous debts and also by showing zero account balances. One can easily file for bankruptcy by showing or denying they have assets. It is convenient for people because they get to pay even lesser interests and loan amounts.
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