Filing for bankruptcy is a difficult decision, and a person considering
this choice should weigh all their options. It is important to understand
there is more than one type of bankruptcy, and one type may be far beneficial
to you than the other. It simply depends on your individual situation.
Today, we will discuss
how chapter 13 bankruptcy works.
Here are the ABC's of Chapter 13 bankruptcy:
The person filing Chapter 13 is
Allowed to keep property. This includes their house, car, etc.
the benefits of filing Chapter 13 is that it can save a home from foreclosure. Filing
can stop the foreclosure process and presents the person a chance to catch
up on past mortgage payments over a certain amount of time.
Chapter 7 - which requires the debtor to sell all assets - filing Chapter 13 allows
a person to restructure their debts. This plan is a good option for those
who hold jobs making a decent wage, but who are struggling to make their
payments because of large amounts of debt, or who have fallen behind on
their bills and cannot get caught up.
This type of bankruptcy requires making a
Budget of debt payment and expenses.
The bankruptcy attorney will assist in hammering out a plan that includes
the person's bills and reasonable expenses (utilities, transportation,
insurance, etc). It is required to include a set amount of money in the
plan. This cash will be paid to the trustee on a regular basis, which
the trustee will then disperse to the debtor's creditors. The plan
must be submitted 15 days after filing.
Creditors must be paid back. Once the court has confirmed the plan, the person who
filed must begin making payments to
the trustee, either directly or through payroll deduction. And, while it is possible
for the debtor to keep some of his existing property, he cannot take on
new debt during this time period without the permission of the trustee.
Chapter 13 bankruptcy is a good choice for a person who is gainfully employed
but mired in debt, or who is trying to avoid foreclosure.
Contact us before making any decisions concerning bankruptcy. We will assist you
in weighing your options.