Things to know about Chapter 13 Bankruptcy
Just because you are dealing with debts doesn’t mean that bankruptcy is an option right away. However, if you are overwhelmed by your debts and cannot find an alternative, bankruptcy can offer immediate relief and pave way for financial freedom. It is wrongly believed that bankruptcy is the end of the road, especially if you have a stable source of income. In your best interests, you may want to meet a Katy bankruptcy lawyer to know your options. This post talks about Chapter 13 Bankruptcy and what to expect from the same.
What is Chapter 13 Bankruptcy?
If you have a stable source of income, you may be eligible to file for Chapter 13 Bankruptcy. In the case of Chapter 13 Bankruptcy, there are debt limitations, which means that your secured and unsecured debts shouldn’t exceed a certain limit. Also, you may be able to prevent foreclosure and retain some of your assets. To file for Chapter 13 Bankruptcy, you must be able to prove that you have a source of income and can pay the creditors as per the repayment plan. You will have a period of three to five years, to repay the debts, in a planned manner. Chapter 13 Bankruptcy is meant only for individuals and not for companies.
What debts can be discharged?
There are certain debts, known as priority claims, which must be paid under the Chapter 13 Bankruptcy plan. This includes child support, tax payments, and alimony. Secured debts must be paid for. If you have a car, house, or similar assets, you have to keep paying the regular payments to retain these assets. You can discharge some of your unsecured debts, including medical bills and credit card dues. In other words, you don’t have to pay for some of these debts, provided you are paying the other priority claims.
Meeting an attorney
Bankruptcy is an important decision and will impact your credit report for a long period of time. This is not one of the decisions to take in haste. It is wise to consult an attorney, who can guide you on Chapter 13 Bankruptcy, and if that’s an option for you. Once your lawyer initiates the proceedings, there will be an automatic stay on your creditors, so you cannot be harassed. The biggest advantage of Chapter 13 Bankruptcy is a person’s ability to keep their assets and repay the debts efficiently.
Contact an attorney to know if this is an option for you!