Chapter 13 Bankruptcy
June 19, 2008
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.
Quick Outline of 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.
The Filing Process
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.
In the process, your income and debts are being looked at. A payment plan is then devised based according to your income. In order to continue with the repayment plan, both you and your creditors 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.
This can take some time to finalize but in the end you are protected and your creditors are getting paid.
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.
Why court involvement? By having court involvement, you can have more protection and options. The court will ensure that you can afford the repayment. You are considered a willing party instead of being demanded for unreasonable payment plan you cannot afford.
Other than that, once you are in the process of bankruptcy, creditors are not allowed to pursue collections thus; you will be able to protect your assets.
Your goal? Start utilizing the knowledge you have acquired her but you also have to remember that there are many negative effect of bankruptcy so, is always best to avoid it. Try working together with your creditors if you feel that you are facing financial problems.
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