Considering Chapter 13 Bankruptcy?
By the time you finish reading this, you will know more about Chapter 13 bankruptcy. As we all know there are a number of different types of bankruptcy and it is essential to at least know the difference. Chapter 13 is not available for all kinds of situations and it should only be filed by the best qualified candidate.
Basic Outline of Chapter 13 Bankruptcy
So, who can file for Chapter 13? Well Chapter 13 can be filed by individuals who have a steady and secured source of income.
Chapter 13 will not wipe clean all your debts.
It is a form of repayment plan where individuals are required to make an agreement with the creditors about a repayment plan based on his/her income.
Steps in Filing Chapter 13 Bankruptcy
The new bankruptcy laws require you to first eek counseling about your credits. You will then need to file paperwork before the process of Chapter 13 begins.
After that process is done, your income and debts are gone through and a payment plan will be drawn out according to your income. However, both the creditors and you, and most importantly the court have to agree with the plan.
You will have to file a lot of paperwork and attend court hearings. It is often smart to have a lawyer who can help you with negotiations with creditors. The process can be frustrating, but you are under the watchful eye of the court and also protected by the court, so you have nothing to worry about. The court will help you to reach a repayment plan you can live with.
This can take some time to finalize but in the end you are protected and your creditors are getting paid.
What You Need to Know About Chapter 13
Have you ever wondered why you should file a Chapter 13? It is just a repayment plan, so why don’t you just consolidate your debts instead? Well, the answer is you can get the court’s involvement in the process.
Why court involvement? By having court involvement, you can have more protection and options. The court will ensure that you can afford the repayment. You are considered a willing party instead of being demanded for unreasonable payment plan you cannot afford.
Other than that, once you are in the process of bankruptcy, creditors are not allowed to pursue collections thus; you will be able to protect your assets.
Of course, as with bankruptcy in general, it is always best to avoid it if possible. You can start with trying to get creditors to work with you and then only move to chapter 7 bankruptcy if you are feeling threatened with losing assets and court proceedings.