Do you have stacks of bills piling up on your desk? This can cause stress and leave you wondering how you are going to pay these bills and get out of debt. You have options to get out of debt, including by filing Chapter 13 bankruptcy.
Chapter 13 bankruptcy is referred to as a wage earner’s plan. This type of bankruptcy lets individuals who are earning a regular income create a plan to repay all or portions of their debts. You propose a repayment plan to the court, and if it’s approved, you will make installments to a court-appointed trustee throughout the length of the plan – typically over 3 to 5 years.
Learn about four benefits Chapter 13 offers and determine if this is the right option for you.
Establish An Affordable Payment Plan
With Chapter 13, you pay back certain debts through a predetermined repayment plan. Each month you will submit a payment to the court, and that money will be distributed to your creditors. Your attorney will negotiate with the court determine how much you pay each month by looking at your monthly expenses, minus IRS standards and the guidelines of a court-approved trustee. The total you are left with determines what your monthly payment will be to the trustee. These payment plans can take three to five years to pay back. From a potential client perspective, it feels like a forced refinance plan that all of your creditors have to agree to, although it is a more powerful solution than a typical refinance.
Stop Harassment From Creditors
When you owe money, your creditors can take extreme measures to get the money you owe. They can call you day and night, show up at your house or place of work, and even garnish your wages. However, when you file Chapter 13 bankruptcy they are required to stop harassing you. There is a stay in place once you file the paperwork.
Get Rid of Debt
One of the biggest benefits of filing Chapter 13 bankruptcy is the ability to discharge some of your debt. Even though you are paying back your creditors through a repayment plan, in most cases you do not pay back all of the money you owe. Under Chapter 13, you can repay a portion of your debt and the remaining amount can be discharged. If you can afford to pay back the entire debt amount under your repayment plan, you can still benefit from not accruing interest on the debt you owe. This helps you get completely out of debt in a few years.
You Will Not Lose Your Home
One of the biggest fears of filing bankruptcy is that you will lose your home. Chapter 13 can help protect your property. Whereas in Chapter 7 bankruptcy may need to liquidate some of your assets, in Chapter 13 you can avoid this through your repayment plan.
If you are behind in your mortgage payments, Chapter 13 bankruptcy can help with that as well. You can pay back the amount you owe through your repayment plan. To keep your home, you need to file Chapter 13 bankruptcy before the foreclosure sale. You will also need to stay current on your upcoming mortgage payments throughout your repayment period.
Let Us Help You
If you’re considering filing Chapter 13 bankruptcy to get out of debt, let our lawyers at The Law Offices of Alexzander C.J. Adams, P.C. help, and explain the pros and cons to you, while helping you through the process. We work for you, the people, and not institutions. Contact us for a free case evaluation, or no-obligation consultation. We are dedicated to helping you overcome this small bump in the road and assisting you to get on with your life.