If you truly cannot make payments on your home or other assets you're probably better off filing Chapter 7 and using the money you would have spent on Chapter 13 to survive on.

Most debtors file for a complete discharge under Chapter 7. Chapter 13 is the repayment chapter. Some debtors will file a Chapter 13 in an attempt to save their home, by incorporating past due payments into the 5 year repayment. But beware, most of these plans fail with the debtors converting to a Chapter 7 anyway. Unless you have a good reason or are not eligible, most debtors should file Iowa bankruptcy under Chapter 7.

NO! Often people file bankruptcy before they are seriously delinquent on their monthly debts. If you can barely make the minimum payments required on your credit cards, or if it appears that you will not be able to make payments as they come due, it may be better for you to file bankruptcy rather than let your situation deteriorate. YES! A federal injunction (automatic stay) goes into effect immediately when a person files bankruptcy, which stops the foreclosure.

A chapter 13 bankruptcy is normally for people with too much income to file a chapter 7 or for those who have a lot of non-dischargeable property. Chapter 13 bankruptcy is for consumers or small businesses who want to repay their creditors while protecting their real estate and personal property and avoiding harassing collections efforts.

Under certain circumstances a debtor may be able to modify a secured debt such as a vehicle or mobile home. The debtor may have the need for bankruptcy relief for future bills and wants to hold open the possibility for conversion or refilling [e.g. anticipated medical bills].

The decision to have debts forgiven under Chapter 7 or to formulate a plan for repayment under Chapter 13 is made after careful attention is given to the types of debts owed, the property owned, and the income of the Debtor. Almost everyone wants to pay his or her debts, but some people cannot afford to do what they want to do, and a Chapter 7 might serve their interests better. In South Carolina, approximately 50% or more of consumer bankruptcy cases filed are Chapter 13.

Chapter 7 provides for a complete discharge. Under Chapter 13, you pay back part of your debt over 5 years. With Chapter 13, you can repay past due home or car loans over time. But beware; many clients delay the inevitable by filing a Chapter 13, making some payments and then failing and having to file a Chapter 7 anyway. Click here for more information.

Filing a chapter 13 bankruptcy has several advantages over a chapter 7 liquidation. A chapter 13 bankruptcy allows you to discharge a few more types of debts than does a chapter 7 bankruptcy. If you own an unincorporated business and your business is not a partnership, you can continue to own and operate the business under a chapter 13 plan. Under a chapter 7 liquidation, a bankruptcy court may order that your business or its assets be sold.

Your Chapter 13 payments should be made payable to Chapter 13 Trustee and you should include your name and case number on your payment and mail it to:

The amount of your Chapter 13 payments are based upon your income, your monthly living expenses, and the amount of your total debts. This is known as the means test which is a pre-determined standard of living based on Internal Revenue Service standards. The Court will allow you to keep and spend so much of your income as determined by the means test.

A person may usually file file for Chapter 13 relief if he is an individual, has a regular income, has fixed unsecured debts of less than an ammount defined in the Bankruptcy code, and has fixed secured debts of less than an ammount defined in the Bankruptcy code.

You must reside or have a domicile, a place of business, or property in the United States; you must not have had a bankruptcy filing dismissed for cause within the last 180 days; you must have a regular income; and your total debts cannot exceed $1,446,550 (secured debts cannot exceed $1,010,650 and unsecured debt cannot exceed $336,900).

If the debtor is temporarily out of work, injured, or otherwise unable to make the payments required under a chapter 13 plan, the plan can usually be modified so as to enable the debtor to resume the payments when he or she is able to do so. If it appears that the debtor's inability to make the required payments continue indefinitely or for an extended period, the case may be dismissed or converted to chapter 7.

If the debtor cannot make a chapter 13 payment on time according to the terms of the confirmed plan, the debtor should contact the trustee by phone and by letter advising the trustee of the problem and whether it is temporary or permanent. If it is a temporary problem and the payments can be made up, the debtor should advise the trustee of the time and manner in which the debtor will make up the payments.

You must wait six years before filing another Chapter 7. However, Chapter 13 bankruptcy may be an option for you.