Navigating through the potential effects of bankruptcy is something people may experience when financial situations call for decisive and protective action. A number of bankruptcy types exist to serve the needs of debtors in different kinds of circumstances, and clarity around chapter 13 bankruptcy information is helpful.
Chapter 13 bankruptcy is a popular choice and has been created to help people capable of repaying debt, but who desire relief from creditor demands, threats of garnishment or repossession, and other difficulties.
As with any bankruptcy filing, Chapter 13 requires certain qualifications on the part of the debtor, and may have different degrees of impact on the lives and financial welfare of debtors depending on individual context. Discussing the possibility of a Chapter 13 filing with an attorney is a wise way to ensure this type of bankruptcy is applicable, and to secure assistance throughout the process itself. Investigating Chapter 13’s advantages and risks can also help determine whether such a filing is advisable.
What draws most debtors to Chapter 13 bankruptcy is its ability to create dramatic debt consolidation. While consolidating debts is possible without going through the process of bankruptcy, Chapter 13 is often able to help debtors secure more manageable payments while also providing relief from constant phone calls and letters, as correspondence from creditors is typically re-directed to an attorney or is ceased completely.
Creditors must accept the repayment terms of a debtor who successfully files for Chapter 13 bankruptcy, and any existing repossession or foreclosure processes are immediately halted when a filing is approved and completed. As a result, debtors who can show steady employment or other means of income but who wish to protect their assets and consolidate outstanding debt –including payments for student loans, child support or alimony, and other obligations– may find a worthwhile financial solution with Chapter 13.
As with any type of bankruptcy filing, Chapter 13 may interfere with a credit rating and can have an impact on any credit decisions that arise over the course of a decade. While paying off outstanding debts and preventing liquidation of assets can be a powerful financial move for individuals and for families, some debtors choose to handle their debts through other means to avoid having any bankruptcy filings on their credit reports. Understanding how a credit report marked with Chapter 13 bankruptcy may interact with credit opportunities can be greatly aided through consulting with an attorney who specializes in this type of bankruptcy.
From the “341 Meeting of the Creditors” in which a trustee investigates personal eligibility for a Chapter 13 filing and examines a repayment plan to the process of completing legal filings, an attorney is a significant asset for those opting for Chapter 13 bankruptcy. As some trustees or bankruptcy judges may ask debtors specifically to retain an attorney to help guide them through proceedings, being prepared with a professional can make the process faster and far more comfortable. Though Chapter 13 bankruptcy isn’t right for everyone, it can help some people break free from debt and protect their possessions, making it a potentially valuable tool.