Understanding Chapter 13 Bankruptcy
I don’t know a thing about you but I’ll bet that you don’t know much about bankruptcy laws. Well, if you haven’t known it yet, Chapter 13 is one of the many types of bankruptcy. Chapter 13 however, is no available for any situations. It is only available for certain situation and only for the best qualified.
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.
What exactly is Chapter 13? Chapter 13 is actually a repayment plan. Individual will work together with the court, and creditor to come out with a repayment plan which is based according to the individual’s income.
Steps in Filing Chapter 13 Bankruptcy
So how do you go about filing for bankruptcy? First and foremost, you need to see a credit counselor to assess your financial status before the paperwork can begin.
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.
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
Many people wonder why to file a Chapter 13. Since it is a repayment plan you are not getting debts wiped away so why not just do debt consolidation instead? The easy answer to that is the court’s involvement in the bankruptcy 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.
Additionally, once you file for bankruptcy you are protected. Creditors can no longer pursue collections. That means you may be able to protect your assets and prevent court cases.
In conclusion, if you think that you are facing financial problems, you should consider all options. You should also remember that bankruptcy us not always a good thing, as you may lose your assets and have a bad credit. Therefore, you should try to avoid it as much as possible.
