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Chapter 13 of the United States Bankruptcy court provides relief to debtors who want to discharge their debts but are unable to do so because of financial constraints. The reasons may vary: unemployment, marital problems, medical expenses, or extended credit limit. If you find yourself in a situation such as this, it can be a harrowing experience. You may have to face the persistent and sometimes threatening demands of creditors. You may also face lawsuits.
Given this scenario, the best option is to file for bankruptcy under chapter 13. If satisfied with your case, the court can permit you to pay your debts, partially or wholly, in installments spread over a period of three years. In some cases, the time period may also be extended to five years.
You can be granted relief under chapter 13, subject to certain conditions. The foremost is that once you file for bankruptcy, you should never absent yourself from attending the proceedings of the court. Also, your unsecured and secured debts should be less than $269,250 and $807,750, respectively.
You cannot file for bankruptcy if during the preceding 180 days, a prior bankruptcy petition filed by you was dismissed because you willfully failed to appear before the court, or that you had refused to comply with its orders. Also, the court may dismiss your petition if the creditors have already applied for permission to hold liens on your property and the court has already granted permission to them. It is important to point out here that corporate bodies or partnership businesses are not eligible to seek relief under this chapter.
To file for bankruptcy, you have to submit an application form, duly signed by you and your attorney, along with a filing fee. Once the court is satisfied with your submission, you will be allowed to pay off your debts under its supervision and protection. This means that your creditors will not be able to harass you to pay their debts. Once the court grants you its protection, you will be assigned a docket number. This is your security against any type of harassment by your creditors.