CHAPTER 13 BANKRUPTCY OPTION
The main advantage to Chapter 13 is that the debtors are allowed to keep their properties while a court-approved repayment plan is in effect.
Often called "wage-earner plan", CHAPTER 13 BANKRUPTCY is generally used by employed people with stable incomes who are in a temporary financial crisis and want to repay at least some of their debts (assuming that their income will grow enough in the next few years to pay off all debts.)
Only an individual with less than $100,000 in unsecured debts and less than $350,000 in secured debts is eligible to file a Chapter 13 bankruptcy. Corporations and partnerships cannot file Chapter 13 bankruptcies.
Other New Requirements:
You will have to get credit counseling before you can file a bankruptcy case to give you an idea of whether you really need to file for bankruptcy or a repayment plan would get you back on your feet. Then, after your bankruptcy case is over, you must attend another counseling session, now to learn personal financial management. Only after you submit proof to the court that you attended both programs your debts can be wiped out by a bankruptcy discharge.
The new bankruptcy law adds some complicated requirements to the field of bankruptcy and imposes some additional requirements on lawyers. Attorneys now will have to spend more time on bankruptcy cases.
This means that bankruptcy attorney fees are going to be more expensive and will be harder to find an attorney to represent you in a bankruptcy case.
Live within your means, never be in debt, and by husbanding your money you can always lay it out well. But when you get in debt you become a slave. Therefore I say to you never involve yourself in debt, and become no man's surety. If your friend is in distress, aid him if you have the means to spare. If he fails to be able to return it, it is only so much lost. - Andrew Jackson quote