Chapter 13 bankruptcy is one type of bankruptcy. There are various types of bankruptcy and understanding each type is important. Chapter 13 is available only in certain situations and only those who are best qualified for this type of bankruptcy should file under it.
The 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.
A Chapter 13 is a repayment plan. Debts are not wiped clean. Instead the individual agrees to a plan in court that established repayment of debts. Creditors also must agree to the plan, which is based on the individual’s income.
Steps in Filing Chapter 13 Bankruptcy
The new bankruptcy laws require you to first seek 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.
As you can see, this is a lot of work and also time consuming as there are a lot of paperwork to be done and also court hearings to attend. However, the best suggestion I can offer you is that you should have a lawyer who can help you with negotiations with creditors. This may not be easy but trust me, it is worth the trouble. This way, you have nothing to worry about.
It may take up a lot of you time before it gets finalize but you will be on the winning end after all the trouble you went through.
Things to Know About Chapter 13 Bankruptcy
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.
As mentioned above, you should file for Chapter 13 instead of debt consolidation because the court can protect you. Other than that, you will also have more options. The court will ensure that you are able to afford the repayment plan and thus treated like a willing party.
Other than that, another advantage of filing for bankruptcy is that you are protected from creditors when you file for bankruptcy.
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 bankruptcy if you are feeling threatened with losing assets and court proceedings.
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