18 August 2008
Chapter 13 Bankruptcy
Posted by Joseph Then under: Personal Finance .
By the time you finish reading this, you will know more about Chapter 13 bankruptcy. As we all know there are a number of different types of bankruptcy and it is essential to at least know the difference. Chapter 13 is not available for all kinds of situations and it should only be filed by the best qualified candidate.
Quick Outline of Chapter 13 Bankruptcy
So, who can file for Chapter 13? Well Chapter 13 can be filed by individuals who have a steady and secured source of income.
What exactly is Chapter 13? Chapter 13 is actually a repayment plan. Individual will work together with the court, and creditor to come out with a repayment plan which is based according to the individual’s income.
The Filing Process
So how do you go about filing for bankruptcy? First and foremost, you need to see a credit counselor to assess your financial status before the paperwork can 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 court, so you have nothing to worry about. The court will help you to reach a repayment plan you can live with.
It may take up a lot of you time before it gets finalize but you will be on the winning end after all the trouble you went through.
Things to Know About Chapter 13 Bankruptcy
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.
As mentioned above, you should file for Chapter 13 instead of debt consolidation because the court can protect you. Other than that, you will also have more options. The court will ensure that you are able to afford the repayment plan and thus treated like a willing party.
Other than that, another advantage of filing for bankruptcy is that you are protected from creditors when you file for bankruptcy.
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.