Facts about chapter 13 Bankruptcy
A Chapter 13 Bankruptcy is also known as Debt Restructure/Repayment Bankruptcy because, as the name suggests, debtors restructure their debt and repay some of the debts that they owe. This is the different than chapter seven bankruptcy, where debt is generally discharged without repayment and unprotected assets are turned over to the court to be sold, or liquidated.
If you have consistent income that enables you to a make a bankruptcy payment plan to repay creditors through the bankruptcy court, then you can opt to file under Chapter 13 bankruptcy.
Chapter 13 Bankruptcy is also a good choice if you have consistent income and just need the help to reign in the debt and take control to pay creditors according to your budget. The amount you earn will determine how long the period of the repayment plan will be in the bankruptcy. Bankruptcy repayment plans can be from three to five years depending upon your yearly income. At the end of the bankruptcy period, any unsecured debt not paid will be discharged. Discharged debt means that you no longer owe it to the creditors.
Another benefit to a Chapter 13 Bankruptcy is the power to save your home, or other assets, and catch-up on past due payments or arrears. In some cases you may even eliminate your second and third mortgages.
Also through Chapter 13 Bankruptcy you may be able to reduce your car loan to the value of your car if your vehicle is upside-down and the loan is at least 910 days old (2.5 years). In a Chapter 13 Bankruptcy, you won’t lose any unprotected assets and you will be able to pay some of your debt off, which may empower to you increase your credit rating.
The bankruptcy process can be confusing to navigate without an experienced attorney since there are a lot of rules to ensure that you file correctly. It’s important to ensure you file correctly to ensure the maximum protection of your debts and assets.