What is Chapter 13 Bankruptcy and How Can it Help?
Filing for bankruptcy can be a difficult decision to make and should not be taken lightly. That said, filing for Chapter 13 bankruptcy has unique benefits that can help you get out of debt. Here’s what you need to know about the process and how it can help you.
What is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy is a type of reorganization bankruptcy where your debts are consolidated into one payment plan. Under this plan, you make payments to a court-appointed trustee who then distributes the money to your creditors. This helps you pay off debts over an extended period of time, typically three or five years. To qualify for Chapter 13 bankruptcy, you must have a regular income and be able to make monthly payments on your debt.
How Can it Help You?
Filing for chapter 13 bankruptcy can offer several advantages over other forms of debt relief such as debt settlement or consolidation loans. For example, when you file under chapter 13, your assets, such as your home or car, are protected from repossession or foreclosure by the court until the repayment period ends. Additionally, if any of your creditors have filed a lawsuit against you prior to filing for bankruptcy protection, they cannot proceed with legal action during the repayment period. Finally, filing under chapter 13 can stop interest rates from accruing on certain types of unsecured debt such as credit cards and medical bills which can help save you money in the long run.
Chapter 13 bankruptcy offers a number of advantages over other forms of debt relief including protection from creditor lawsuits and repossession/foreclosure actions as well as stopping interest rates from accruing on certain types of unsecured debt. However, it’s important to remember that filing for chapter 13 requires making regular payments on time each month in order to successfully complete the repayment plan and avoid having debts discharged without being paid in full. If this sounds like something that could work for you, contact an experienced attorney today to find out more about how chapter 13 could help relieve your financial burden and improve your overall financial situation in the long run!