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.
The Chapter 13 Bankruptcy
If you are wondering who can file for Chapter 13, let me tell you this. Chapter 13 can only be filed by individuals who have a steady and secured 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.
Filing Chapter 13 Bankruptcy
A Chapter 13 requires you to first abide by the new bankruptcy laws and seek credit counseling. You will then file paperwork and the process will begin.
During a Chapter 13 your income and debts are looked at and a payment plan is devised based upon your income. You and your creditors must agree to the legally binding repayment plan.
It is not easy filing for paperwork and going to court and the best suggestion I can offer you are that you should hire a lawyer to assist and guide you. Under watchful eyes of an experienced lawyer and the court, you don’t have anything to worry about. The court will ensure that you would be able to afford the repayment plan.
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
After you have read all these, you may be wondering why you should file for Chapter 13 if it is only a repayment plan. Well, my answer to that is so that you can get protected by the court. Going to court and getting the court involved is not always a bad thing.
You have more protection and more options. The court makes sure you can afford the repayment. It is an equal process where you are treated like a willing party instead of being badgered into a payment plan you can not afford.
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.