Investopedia

Continue to Site »

Wage Earner Plan (Chapter 13 Bankruptcy)

Filed Under » , , ,
Dictionary Says

Definition of 'Wage Earner Plan (Chapter 13 Bankruptcy)'

Also known as a Chapter 13 bankruptcy, this enables individuals with regular income to develop a plan to repay all or part of their debts for a period of three to five years. The repayment period depends on the debtor's monthly income as compared to the applicable state median. During this repayment period, the law forbids creditors from starting or continuing collection efforts.

Chapter 13 was formerly called a wage earner's plan because relief under it was only available to individuals who earned a regular wage. Subsequent statute changes expanded it to include any individual, including the self-employed and those operating an unincorporated business.



Investopedia Says

Investopedia explains 'Wage Earner Plan (Chapter 13 Bankruptcy)'

A Chapter 13 bankruptcy offers individuals a number of advantages over Chapter 7, the most important being that it offers them an opportunity to save their homes from foreclosure. Chapter 13 also allows individuals to reschedule secured debts - except for a mortgage on their primary residence - and extend them over the life of the plan, which may lower their payments. 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.

Any individual is eligible for Chapter 13 relief as long as his or her unsecured debts are less than $360,475, and secured debts are less than $1,081,400 (as of 2010), and he or she has received credit counseling within 180 days before filing. A corporation or partnership is not eligible for Chapter 13 bankruptcy.



Articles Of Interest

  1.

    Debt Consolidation Made Easy

    These five steps can help get you out of debt faster and easier than you'd ever imagined.

  2. Boomer Bankruptcy Strains Retirement

    Having to file for bankruptcy adds risk and steals the luster from your golden years.

  3. Declaring Bankruptcy Is No Easy Out

    Going bankrupt can help pull you out of debt, but it's rarely the best option.

  4. Life After Bankruptcy

    Find out what you have to look forward to after filing for Chapter 7 or 13.

  5. Saving Your Home From Foreclosure

    Learn the tactics you can use to prevent your home from being repossessed.

  6. Changing The Face Of Bankruptcy

    A 2005 law attempts to unmask fraudulent debtors and still save those who are struggling. Will it affect you?

  7. Stop Keeping Up With The Joneses - They're Broke

    Conspicuous consumption could be robbing you of future wealth.

  8. 6 Tips For Selling Your Home Fast

    Find out what you can do to stand out from the competition and make your home an easy sell.

  9. Women: Invest In Your Financial Literacy

    Learning about money may seem intimidating, but it's not as hard as it looks.

  10. 6 Financial Benefits Of Spring Cleaning

    This year, combine your spring cleaning strategies with your big-picture financial objectives.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Validation Period

    The amount of time necessary for the premium on an insurance policy to cover the commissions, the cost of investigation, medical exams and other expenses associated with the issuance of the policy.

  2. Winner's Curse

    Because of incomplete information, emotions or any other number of factors regarding the item being auctioned, bidders can have a difficult time determining the item's intrinsic value. As a result, the largest overestimation of an item's value ends up winning the auction.

  3. Glocalization

    A combination of the words "globalization" and "localization" used to describe a product or service that is developed and distributed globally, but is also fashioned to accommodate the user or consumer in a local market.

  4. Disaster Loss

    A special type of tax-deductible loss, similar to a casualty loss, where a loss has been incurred by taxpayers who reside in an area that has been designated as a federal disaster area by the President.

  5. Fool In The Shower

    The notion that changes or policies designed to alter the course of the economy should be done slowly, rather than all at once.

  6. Pattern Day Trader

    An SEC designation for traders who trade the same security four or more times per day (buys and sells) over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.
Trading Center