"New Chapter 13 Rules - What Has Changed?"

Under new Chapter 13 rules basically you are allowed to use your future earnings to pay of your debts.

How can Chapter 13 be beneficial for you? Well under Chapter 13 bankruptcy rules in most cases you can keep your property if you agree to pay off most of your debts over time.

You and your lawyer will have to come up with a bankruptcy chapter 13 payoff program which will make it possible for you to pay off at least some part of your debt to your creditors over the following three years. Your plan has to be approved by the court.

Under Chapter 13 rules bankruptcy can be initiated by you or your creditors, after that a trustee will be appointed to supervise your assets which then become impossible to sell or to be transferred.

Sometimes even some pre-bankruptcy filing property transfers can be delayed or made invalid by the court.

Chapter 13 bankruptcy trustee job descriptions also include collecting your payments and keeping track of chapter 13 payments plan.

Be aware that a trustee’s services are not free and that they can vary depending on your earning and debt amount.

New 2005 Chapter 13 bankruptcy rules have brought along some new tough changes. For example: in case that your income is bigger then median income of the state you live in you will have to calculate you disposable income by using IRS allowed expense amounts, and not your actual monthly expenses.

What that means?
It means that if your rent is actually $500 per month but IRS allows for just $400, then only $400 will be recognized as disposable income.

To make things more difficult for you, allowed expenses will be subtracted from your average six month income before filing bankruptcy and not from your present earnings, because of this you may be forced to pay off much more then you actually have to spare each month.

All of this can mean that a lot of people will fail to keep up with their Chapter 13 repayment plans and that they will fail.

One of the additional new Chapter 13 rules is that in case that you have already filled for bankruptcy in the last 180 and your application was dismissed, you might not be allowed a new application. Also you must owe under $250,000 in unsecured debts and under $750,000 in secured debts if you want your application to go through.

When is Chapter 13 bankruptcy discharged?
And at the end if everything goes well, and you have complied with all the new Chapter 13 bankruptcy rules you will receive a proof of chapter 13 bankruptcy discharge sometime in the next 60 days after your final payment and a trustee has been ensured that your last payment has been made and pay off finished...

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