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Is Chapter 7 bankruptcy is also known as the wage earners plan?

Is Chapter 7 bankruptcy is also known as the wage earners plan?

Chapter 7 refers to liquidation while Chapter 13 refers to adjustment of debts of an individual with regular income. More commonly, Chapter 7 bankruptcy is commonly referred to as a “straight bankruptcy” or “liquidation bankruptcy”. Chapter 13 is commonly called the “wage earner’s bankruptcy”.

What has flagged your account as wage earner or similar plan?

In a Chapter 13 bankruptcy — formerly called a wage earner plan — a person petitions the court to reduce the total amount owed and provide a reasonable repayment schedule based on his or her income. Similar to a Chapter 7 bankruptcy, the debtor gets legal protection from lenders’ collection attempts.

What is a wage earners plan?

What Is a Wage Earner’s Plan? A wage earner’s plan, known more formally as Chapter 13 bankruptcy, enables individuals with a regular income to restructure their obligations to repay their debt over time. 1 In a wage earner’s plan, the debtor does not seek to earn general forgiveness of their outstanding debts.

What is Chapter 11 bankruptcy for companies?

This chapter of the Bankruptcy Code generally provides for reorganization, usually involving a corporation or partnership. A chapter 11 debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time.

How does a Wage Earner Plan work in bankruptcy?

This “wage earner plan” is only available to debtors who petition for Chapter 13. The court appoints a bankruptcy trustee to reorganize the debts and arrange an affordable repayment plan on the debtor’s behalf. The debtor must inform the court through the trustee of all assets and debts to qualify.

Who is eligible for a Wage Earner Plan?

This “wage earner plan” is only available to debtors who petition for Chapter 13. The court appoints a bankruptcy trustee to reorganize the debts and arrange an affordable repayment plan on the debtor’s behalf.

What’s the difference between Wage Earner’s Plan and Chapter 7?

Wage Earner Plan (Chapter 13 Bankruptcy) vs. Chapter 7. In addition, Chapter 13 has a special provision that may protect co-signers, and also acts like a consolidation plan under which plan payments are made to a trustee who distributes them to creditors.

How long does a Wage Earner Plan last?

The Wage Earner Plan. The federal bankruptcy code allows debtors with a regular income to keep assets and repay their debts over a three- to five-year period. This “wage earner plan” is only available to debtors who petition for Chapter 13.

What kind of bankruptcy is a Wage Earner’s Plan?

A wage earner’s plan (a common name for Chapter 13 bankruptcy) is a form of debt relief for people who have a regular income and wish to repay all (or part of) their debts.

Wage Earner Plan (Chapter 13 Bankruptcy) vs. Chapter 7. In addition, Chapter 13 has a special provision that may protect co-signers, and also acts like a consolidation plan under which plan payments are made to a trustee who distributes them to creditors.

Where can I file a Wage Earner’s Plan?

Because a wage earner’s plan is actually a bankruptcy, you’ll need to work through the U.S. bankruptcy courts; the two courts that handle these cases are located in Greenbelt and Baltimore. This form of debt relief is a little like a consolidation loan.

How does a chapter 13 bankruptcy plan work?

Finally, chapter 13 acts like a consolidation loan under which the individual makes the plan payments to a chapter 13 trustee who then distributes payments to creditors. Individuals will have no direct contact with creditors while under chapter 13 protection.