Chapter 13 Bankruptcy

This bankruptcy is also called the wage earner plan. This plan allows you to reorganize your debts and make payments to the bankruptcy trustee for a period of 3 years up to 5 years in some cases. Your monthly payment amount will be determined by what your current monthly income is and how much you can afford to pay. The trustee will take your monthly payments and distribute them amongst your creditors.

Chapter 13 will show up under the public record portion of your credit report. You will need to send a copy of your bankruptcy papers to the three credit bureaus so that they can show that each of your creditors have been included in the bankruptcy. Otherwise, it might look like you have unpaid past due or collection accounts that are not part of the bankruptcy. This will hurt your credit scores even more if potential lenders can't see what was in the bankruptcy and what wasn't.

Make all your payments to the trustsee on time each month to re-establish a good payment history.

After making 12 months worth of on time payments to the trustee you might be able to purchase a home, providing that you haven't had anything else derogatory happen to your credit since filing bankruptcy. You would have to qualify for the new house payment and you would have to obtain permission from the trustee to purchase a home but I've seen this work out many times.

A chapter 13 bankruptcy will stay on your credit report for 7 years from the date you filed it and then it can be purged. To learn more about chapter 13 click the link below.

http://www.uscourts.gov/bankruptcycourts/bankruptcybasics/process.html