Many individuals experience fear and anxiety upon the very mention of the word “bankruptcy.” For those who are unfamiliar with what the process of filing for bankruptcy entails, these feelings are understandable.
However, in reality, when a person or business files for bankruptcy, they are not doing so because they have hit rock bottom. Rather, declaring bankruptcy is an intelligent financial decision that allows individuals and businesses the opportunity to catch up on overdue debts that would otherwise continue to grow.
There are several ways that one can file for bankruptcy. Chapter 13 may be the preferred way for you to file. You may be asking yourself, “What is Chapter 13 Bankruptcy?” Well, with this type of bankruptcy, an individual who meets the requirements to file can create a payment plan to settle their debts without selling or liquidating their assets and properties.
Read on to learn precisely how to file for Chapter 13 Bankruptcy and begin the process of taking back control over your financial life.
Each type of bankruptcy entails specific filing requirements that individuals must meet before moving forward.
For example, whereas a debtor with insignificant income and few assets may decide to file Chapter 7 Bankruptcy, individuals with a steady income and many assets (such as multiple properties and vehicles) usually opt to file for Chapter 13 Bankruptcy.
Additionally, a prospective filer cannot have a debt that exceeds the maximum amount designated by their state for filing.
The primary reason an individual must possess a steady income and a relatively low debt in order to file is that they must show proof of their ability to pay the monthly payments as outlined in their payment plan as well as their current living expenses.
When a debtor files for Chapter 13 Bankruptcy, their goal is to maintain their current properties and assets by creating a manageable payment plan that satisfies creditors.
In other words, this type of bankruptcy does not involve liquidation. However, to make the payment plan payments while continuing to afford your lifestyle, you may need to consider selling off select properties and assets such as a vacation home or a second vehicle.
When compared to liquidating all of your properties and assets to satisfy debts, as is required when filing Chapter 7 Bankruptcy, it becomes clear why debtors prefer Chapter 13.
Before determining whether you qualify for Chapter 13 Bankruptcy, you should discuss your financial situation with a lawyer specializing in bankruptcy.
If determined that you do, in fact, qualify, your lawyer will assist you in filling out the required forms and sending all documents and information to the court.
After turning in all documents and completing a mandatory credit counseling course, you and your lawyer can begin formulating an achievable repayment plan. The plan must address all of your current debts, as well as other expenses including mortgages, car payments, and any other monthly payments that you make.
At this point, your lawyer will submit the proposed plan to your creditors, and, if approved, you must begin paying immediately.
It is important to note that any missed payments can contribute to the nullification of your plan, which will leave you with no other option but to file for Chapter 7 Bankruptcy and face selling your properties and assets.
However, most filers experience grand relief from their debts after filing Chapter 13 Bankruptcy and soon return to financial stability.
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.