Showing posts with label File for Chapter 13. Show all posts
Showing posts with label File for Chapter 13. Show all posts

Wednesday, January 18, 2023

6 Basics of Chapter 13 Bankruptcy

Dealing with debt is never easy, which is why many people go bankrupt when they’ve exhausted all other options. The most common type of bankruptcy is Chapter 7, but for those who can’t qualify for it or don’t want to lose their assets, Chapter 13 may be a better option. 

Here are the basics of Chapter 13 bankruptcy that you need to know to decide if it’s right for your situation.

What is Chapter 13?

Chapter 13 bankruptcy is a debt repayment plan designed to help individuals reorganize their finances and become debt-free over time. It works by allowing the individual to create a three-to-five-year payment plan that will allow them to pay off their debts in full while still being able to keep their assets. 

Once the payment plan is approved by the court and creditors, the individual must make payments on time for it to remain active and successful.

Who Can Qualify For Chapter 13?

To qualify for Chapter 13 bankruptcy, you must pass a means test. This test looks at your current income versus your expenses and determines whether or not you have enough money left over each month after paying your bills to pay off all of your debts within three or five years. 

You may only qualify for bankruptcy protection if you have enough disposable income from month-to-month.

In addition, individuals who have filed for Chapter 7 bankruptcy within the past six years can only file for this type of protection again after that period has passed. To know more about the qualifications, consult a qualified bankruptcy attorney such as Ricardo B. Casas.

What Are The Benefits Of Filing For Chapter 13?

The main benefit of filing for this type of protection is that it allows you time—usually up to 60 months—to pay off all of your debts without having creditors coming after you or taking any action against you during that period. 

In addition, filing for this type of protection can stop any foreclosure proceedings against your home and reduce the amount of interest owed on certain types of loans, such as student loans and car loans. 

Finally, filing under this chapter also stops collection calls from creditors since they cannot contact an individual while they are under court protection.

Filing under Chapter 13 can be a great way to get out from under crushing debt while keeping your assets intact and avoiding aggressive collection tactics from creditors. 

If you think this might be an option worth exploring, talk with an experienced attorney about how best to file for this type of protection today! 

Understanding the basics outlined here will help you make an informed decision about whether or not filing for Chapter 13 Bankruptcy is right for your situation.

Join 1000's of People Following 50 Plus Finance
Real Time Web Analytics