Filing bankruptcy is one of the options available to you if you are struggling to pay your debts. The two main types of bankruptcy for individuals are Chapter 7 bankruptcy and Chapter 13 bankruptcy, which offer different ways to deal with debt.
Chapter 13 bankruptcy allows you to work out an effective plan to pay off your debts. Our experts at The Law Office of Veronica Deaver discuss an overview of chapter 13 bankruptcy and how it can help your financial situation.
What Is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy enables debtors to keep their property and pay off their debts over time, usually with a payment plan of three to five years. Also called a wage earner's plan, it's ideal for people with a regular income to help them pay all or part of their debts in installments to creditors. The repayment plan can vary between three to five years and depends on whether the debtor's income is below or above the state median.
What Are the Reasons for Filing Chapter 13 Bankruptcy?
Chapter 13 offers excellent advantages for people considering bankruptcy as a tool to manage their debt. One of the most significant advantages is that it allows debtors to prevent foreclosure on their homes.
Debtors can also reschedule secured debts and extend them across the life of the payment plan, reducing payments. Often, co-signers are also protected by a provision that protects third parties in Chapter 13 bankruptcy, which could be helpful for your family.
If you file for Chapter 13 bankruptcy, you will make payments to a trustee, who will then distribute them to creditors. The trustee will act as a mediator between you and the creditor, making the process as straightforward as possible.
What Obligations Do You Have After Filing Chapter 13 Bankruptcy?
Under this type of bankruptcy, debtors still have certain repayment obligations. You need to meet the regular payments as part of your payment plan to ensure your creditors are either partially or fully paid back.
The repayment plan acts like a consolidation loan, turning your debts into one easy payment. Although you can keep your home, you must pay all mortgage payments.
Is Chapter 13 Bankruptcy Right for You?
It can be a bit more complicated to file Chapter 13 bankruptcy compared to Chapter 7 bankruptcy, but it's worth it for the numerous advantages that come along with it.
Chapter 13 bankruptcy gives you flexibility and freedom to maintain assets like your home, car, and other possessions. Many people find peace of mind working with a trustee since sometimes dealing with creditors isn’t easy.
Get Financial Help with Chapter 13 Bankruptcy
Chapter 13 bankruptcy is a complicated process, so it's essential to have a knowledgeable attorney on your side. The Law Office of Veronica Deaver is experienced and knowledgeable in Chapter 13 bankruptcy law, ensuring you get the support and advice you need. Our team is happy to discuss your options and help you find a plan that meets your needs.
Schedule a Consultation at The Law Offices of Veronica Deaver
If you are filing for bankruptcy, we understand that it can be overwhelming. Our team at The Law Office of Veronica Deaver is dedicated to giving you quality advice and support you can trust. Don’t hesitate to call us at (469) 351-1540 or schedule a free consultation online to learn more about how we can help you during a difficult time.