The Bankrupts Act of 1825 saw England emerge as a world leader in regards to bankruptcy. Subsequent laws were enacted that governed debtor and creditor behavior. One law in particular declared that no commission grounded on the act of bankruptcy would be “deemed invalid by reason of such declaration having been concerted or agreed upon between the bankrupt and any creditor.”
Many people aren’t aware that they are able to choose how their debts will be handled when they file for personal bankruptcy. This allows the debtor to create a payment plan that’s ideal for them and can control how the bankruptcy will play out.
Chapter 13 bankruptcy allows you to repay your debts. Depending on the terms agreed upon, you typically get between three and five years to catch up.
When you’re having trouble keeping up with all your debt payments, you may worry about whether you’ll be able to keep the house. Depending on the type of bankruptcy you file, you may be able to stop your bank from moving forward with foreclosure proceedings.
What happens if my income is higher than the median state income? Am I limited to a Chapter 13 reorganization filing? Not necessarily, according to bankruptcy experts. There is an additional complicated analysis, called the “means test,” that makes it possible for some high-income filers to still qualify for a Chapter 7 filing. A bankruptcy attorney can help with this extremely complicated process.
Under a Chapter 13 bankruptcy, the debtor proposes a reorganization plan that uses available discretionary income to pay off creditors. Debtors who can't qualify under the income guidelines for a Chapter 7 bankruptcy must file under Chapter 13.