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Chapter 13 Bankruptcy
Chapter13 refers to a specific chapter in the bankruptcy code that allows debtor to pay out his debts over a period of time. It allows the debtor to pay out the debts between three to five years. The debtor is required to file for the chapter13 bankruptcy after which a bankruptcy trustee is appointed for collecting payments from the debtor and settling the external debts.
Chapter 13 bankruptcy is at times called as reorganization bankruptcy. It is far different from the chapter 7 bankruptcy. In the later the debts are eliminated once for all without any repayment.
On the other hand, in the chapter 13 the debtor is required to repay a sizeable portion or all of his debts within five or three years depending upon the debt size. The eligible debtors for filing chapter13 bankruptcy are those who have an active source of income with secured debts less than $ 922,975 and unsecured debts less than $ 307, 675. Above all, he should not have any of his previous bankruptcies dismissed within 180 days.
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