There are many ways in which an individual can file for bankruptcy and alleviate substantial debt. However, the bankruptcy plan that you choose is dependent upon your unique finances. If you have a steady income and desire to keep your assets and properties, then filing for Chapter 13 Bankruptcy is the best course of action for managing your debt while upholding your interests.
What is Chapter 13 Bankruptcy? With this type of bankruptcy, debtors can create customized bankruptcy payment plans that better represent their financial situation while also satisfying creditors. In order to qualify, prospective filers must meet specific requirements for both their income and the debt they owe.
Once approved, individuals can expect much more manageable monthly payments as well as reduced levels of financial stress as they begin the process of returning to their everyday, debt-free lives.
Read on to learn how to file for Chapter 13 Bankruptcy and develop a payment plan to settle your debt.
Upon filing for Chapter 13 Bankruptcy, you must submit monthly payments based on a payment plan that both you and your creditor agree on. The purpose of the payment plan is to allow debtors the opportunity to retain ownership over their properties and assets while also making payments towards their debt.
Essentially, most debtors find themselves in debt due to being unable to afford their current monthly payments, and thus they risk losing their home and other assets. However, when one files for Chapter 13 Bankruptcy, the debt is restructured into more manageable monthly payments that extend over several years.
The restructuring of debt into achievable payments is the primary reason an individual would choose to file under Chapter 13 Bankruptcy.
However, if they are unable to meet the new monthly payments, debtors may have no choice but to file for Chapter 7 Bankruptcy. At this point they risk selling off property and assets to pay collectors.
Just as there are requirements for filing other types of bankruptcy, prospective Chapter 13 filers must also meet certain standards before being approved. First and foremost, debtors need to prove that they receive a steady income that allows them to make the monthly payments in addition to the costs of their lifestyle.
Also, an individual’s debt cannot be so substantial that it surpasses the limit to file.
If determined that you meet these requirements as well as any additional standards unique to your state, your case is approved, and you start making payments toward your debt immediately.
Of course, with certain types of debt, creditors and mortgage lenders receive 100% of the debt that you owe. Other forms of debt may require only partial repayment, or in some cases, no repayment at all. So, ultimately, the amount a debtor must pay in their Chapter 13 Bankruptcy payments depends on the type of debts they owe. Also, their monthly income comes into play.
The following types of debt must be paid entirely:
Furthermore, the length of one’s payment plan depends on their income level. If your monthly income is more than the median monthly income in your state, the repayment plan must last at least five years. If your income is lower, you must make payments over the course of three years.
Despite how daunting the situation of filing for bankruptcy can seem, an experienced bankruptcy lawyer can make the process as stress-free as possible while ensuring that the payment plan you create is achievable based on your income and agreeable with your creditors.
You may feel as though you are drowning in debt, but filing for Chapter 13 Bankruptcy can help. Contact a lawyer today to begin formulating a plan to take back control over your finances.
While your financial situation may be overwhelming, the process of filing for Chapter 13 Bankruptcy doesn’t have to be.
To ensure that you are following all requirements and creating a manageable plan that satisfies your interests and those of your creditors, enlist the assistance of an experienced bankruptcy lawyer.
With their expertise, you can develop the best financial plan for minimizing your debt and resuming your life.
At Blue Bee Bankruptcy, our lawyers are highly experienced in the various filing options.
More importantly, we understand that each case we receive is unique and each client has different needs and goals. We will discuss these signs with you and decide the best route to take.
We strive to help our clients rebuild their lives and take steps toward a better financial future through filing.
If you’re dealing with the potential of bankruptcy, give us a call. Our team will work to help you by reviewing all of the options our firm has available. We will ensure you’ll get the best possible outcome for your situation.
Get in touch today so we can start working on either halting bankruptcies or preventing them from taking place altogether!
Contact Us Today For Help! You can schedule your free consultation online or call us at (801) 285-098.
