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. How To Keep Costs Low When Refinancing Your Home

    With interest rates still being relatively low, now is a great time to capitalize on refinancing your home. Be aware of what fees are involved in a refinance, and how to keep these costs low.

  8. 5 Money Moves To Make In September

    From a financial perspective, September is a great time for a quick reboot of your financial mind-set.

  9. How To Properly Research For The Best Mortgage Rate

    You’ve probably been told to shop around for the best rate, but what exactly does that entail? Find out how to ensure you're getting the best possible rate on your mortgage.

  10. What Is A Mortgage?

    A mortgage is a loan used to purchase a home, where the property serves as the borrower's collateral.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Network Effect

    A phenomenon whereby a good or service becomes more valuable when more people use it. The internet is a good example...

  2. Racketeering

    Racketeering refers to criminal activity that is performed to benefit an organization such as a crime syndicate. Examples of racketeering activity include...

  3. Lawful Money

    Any form of currency issued by the United States Treasury and not the Federal Reserve System, including gold and silver coins, Treasury notes, and Treasury bonds. Lawful money stands in contrast to fiat money, to which the government assigns value although it has no intrinsic value of its own and is not backed by reserves.

  4. Fast Market Rule

    A rule in the United Kingdom that permits market makers to trade outside quoted ranges, when an exchange determines that market movements are so sharp that quotes cannot be kept current.

  5. Absorption Rate

    The rate at which available homes are sold in a specific real estate market during a given time period.

  6. Yellow Sheets

    A United States bulletin that provides updated bid and ask prices as well as other information on over-the-counter (OTC) corporate bonds...
Trading Center