Considering Chapter 13 Bankruptcy?
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.
Quick Outline of 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.
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.
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.
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.
The process of fling for Chapter 13 can be time consuming but don’t worry about that because as long as you are still undergoing the process of filing for Chapter 13, your creditors will not be able to collect any form of debts from you.
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.
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.
Filed under: Finance