Chapter 13 Bankruptcy Laws
Chapter 13 bankruptcy is one type of
bankruptcy. There are various types of bankruptcy and
understanding each type is important.
Chapter 13 is available only in certain situations and only
those who are best qualified for this type of bankruptcy should
file under it.
Basic Outline of Chapter 13 Bankruptcy
Laws
Chapter 13 can be filed by individuals. It can only be
filed by an individual who has a steady and secure source of
income.
A Chapter 13 is a repayment plan. Debts are not wiped
clean. Instead the individual agrees to a plan in court
that established repayment of debts. Creditors also must
agree to the plan, which is based on the individual's
income.
Steps in Filing Chapter 13 Bankruptcy
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.
During a Chapter 13 your income and debts are looked at and
a payment plan is devised based upon your income. You and
your creditors must agree to the legally binding repayment
plan.
You will have to file a lot of paperwork and attend court
hearings. It is often smart to have a lawyer who can help
you with negotiations with creditors. The process can be
frustrating, but you are under the watchful eye of the court
and also protected by the curt, so you have nothing to worry
about. The court will help you to reach a repayment plan
you can live with.
This can take some time to finalize but in the end you are
protected and your creditors are getting paid.
Things to Know About Chapter 13 Bankruptcy
Laws
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.
Additionally, once you file for bankruptcy you are
protected. Creditors can no longer pursue
collections. That means you may be able to protect your
assets and prevent court cases.
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.
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