Are you tired of seeing creditors’ numbers on your phone daily? Are you getting notices in the mail? It can be time to act on your mounting debt. Taking steps to get out of debt can reduce stress and help you recover financially.
Chapter 13 can be the solution you need. This form of bankruptcy allows you to create a court-approved repayment plan to get out of debt.
Benefits of Chapter 13
Filing Chapter 13 bankruptcy offers numerous benefits compared to Chapter 7 or other debt-relief options. Some of the key advantages of Chapter 13 include:
- Debt Reorganization: Chapter 13 allows you to consolidate your unsecured debts, including credit cards, medical bills, and personal loans, into one manageable monthly payment. This helps you reduce the stress of paying numerous large bills each month.
- Stop Creditor Harassment: An automatic stay is implemented once you file for Chapter 13 bankruptcy. This means that creditors are not allowed to contact you for payments or try to collect money from you during the bankruptcy proceedings.
- Catch Up on Missed Payments: Chapter 13 lets you make up these payments in your repayment plan if you’re behind on mortgage or car payments. This allows you to catch up and potentially avoid losing your house or repossessing your vehicle.
- Keep Your Property: Unlike Chapter 7, which may require selling some assets to repay creditors, Chapter 13 allows you to keep most of your belongings, including your car and house (as long as you stay current on your payments). However, you must make your monthly payments on time to follow your plan.
- Rebuild Your Credit: Completing your Chapter 13 bankruptcy plan will show creditors that you are committed to making payments and becoming financially responsible. This can positively impact your credit score over time, making it easier to qualify for loans and better interest rates in the future.
When to File For Chapter 13
While there are many positives to filing for Chapter 13, it isn’t the right choice for everyone. When determining if you should file for Chapter 13 instead of Chapter 7, it’s essential to consider the following factors:
- Income: You must have a steady income to make your monthly payments.
- Debt Amount: There are limits on the amount of debt you can file under Chapter 13. An experienced bankruptcy attorney can help you determine if this is your best option.
- Commitment: Chapter 13 requires a 3-5 year commitment to your repayment plan. During this time, it’s essential to follow the court-approved budget.
How to File For Chapter 13
If you’re considering filing for Chapter 13 bankruptcy, hiring a trusted and experienced bankruptcy attorney is essential. An attorney can help you complete the following crucial steps:
- Review your financial situation: An attorney can assess your debt, income, and assets to determine if Chapter 13 is the right option for you. If not, they can help you file for Chapter 7 bankruptcy or pursue other options.
- Guide you through the process: Filing for bankruptcy involves legal procedures. An attorney can ensure everything is completed correctly and on time and represent you in court if needed.
- Develop a repayment plan: Your attorney will work with you to create a realistic and manageable repayment plan that meets your financial needs and court requirements. They will also help you submit it and work with the court-appointed trustee to ensure you follow the correct process.
Let Us Help You
If you are considering filing for Chapter 13 bankruptcy, it’s essential to understand the process and avoid critical mistakes. Let our lawyers at the Law Offices of Alexzander C.J. Adams, P.C. help. 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 minor bump and get on with your life.
