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Should You Terminate a Chapter 13 Bankruptcy?

Posted By admin || 12-Oct-2011

Should You Terminate a Chapter 13 Bankruptcy?A Chapter 13 bankruptcy is a court ordered repayment plan that helps filers establish plans that they can manage so they can stay on top of their debts and in some cases keep their homes and other priority items. A traditional Chapter 13 bankruptcy lasts for three years but they can be extended to five years.

A lot can happen in the course of three to five years and you may suddenly discover that you no longer can, or want to stick, with the Chapter 13 payment plan. If you have a rise in your income, so that you can afford your debts, and want to take control of your finances you can request a dismissal. This means you will be responsible for all of your debt once again, but talk to your bankruptcy attorney to make sure you understand the ramifications of a dismissal and future debt.

If you find the opposite is true, and you are suddenly in a worse position financially and you cannot make your Chapter 13 monthly payments, then you may be able to convert to a Chapter 7 bankruptcy . The court will review your current situation and your payment history and determine if you should make the switch.

Sometimes your trustee will review your situation and determine that rather than terminating the Chapter 13 bankruptcy there should be a plan modification instead, these are very common and may be the best solution.

Categories: Chapter 13 Bankruptcy
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