Chapter 13 bankruptcy is one type of bankruptcy. There are various types of bankruptcy and understanding each type is important. Chapter 13 is available only in certain situations and only those who are best qualified for this type of bankruptcy should file under it.
Quick Outline of Chapter 13 Bankruptcy
If you are wondering who can file for Chapter 13, let me tell you this. Chapter 13 can only be filed by individuals who have a steady and secured income.
Chapter 13 will not wipe clean all your debts. It is a form of repayment plan where individuals are required to make an agreement with the creditors about a repayment plan based on his/her 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.
This can take some time to finalize but in the end you are protected and your creditors are getting paid.
What You Need to Know
Have you ever wondered why you should file a Chapter 13? It is just a repayment plan, so why don't you just consolidate your debts instead? Well, the answer is you can get the court's involvement in the 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.
In conclusion, if you think that you are facing financial problems, you should consider all options. You should also remember that bankruptcy us not always a good thing, as you may lose your assets and have a bad credit. Therefore, you should try to avoid it as much as possible.
