Understanding Chapter 13 Bankruptcy
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.
Basic 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.
Chapter 13 will not wipe clean all your debts. It is a form of repayment plan where individuals are required to make an agreement with the creditors about a repayment plan based on his/her 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.
After that process is done, your income and debts are gone through and a payment plan will be drawn out according to your income. However, both the creditors and you, and most importantly the court 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.
It may take up a lot of you time before it gets finalize but you will be on the winning end after all the trouble you went through.
Things to Know
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.
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, once you are in the process of bankruptcy, creditors are not allowed to pursue collections thus; you will be able to protect your assets.
Of course, as with bankruptcy in general, it is always best to avoid it if possible. You can start with trying to get creditors to work with you and then only move to bankruptcy if you are feeling threatened with losing assets and court proceedings.
Becoming a bankrupt means that you have problems taking loans and other financial services. Worst still, the bankruptcy tag will stick with you for up to 10 years! Find out how you can avoid Bankruptcy and find out more about Chapter 7 Exemptions