Filing for bankruptcy is a major decision that can have long-term consequences. It is not a decision that should be taken lightly. If you are considering filing for bankruptcy, you should obtain as much information as possible about the process and consequences to see whether it is the right decision. As a reliable and qualified Chapter 13 bankruptcy lawyer can tell you, bankruptcy has many requirements and eligibility depends on what kind you are filing for. One of the types of bankruptcy that many people commonly file for is Chapter 13 bankruptcy.
To file for Chapter 13 bankruptcy, you need to meet certain eligibility requirements. To find out if you are eligible to file, you must pass a means test where you will be evaluated based on your income. Only individuals can file for Chapter 13 bankruptcy. Typically if you do not qualify for Chapter 7 bankruptcy, you may be eligible for Chapter 13. If you meet all of the requirements, you may be a good candidate. A bankruptcy lawyer can explain all of the requirements if you need more information about what they entail.
When a person files for Chapter 13 bankruptcy, their debts are reorganized into a payment plan and discharge only happens once all payments are made. Once Chapter 13 bankruptcy is initiated, all harassment and collections notices will cease. Creditors will not be allowed to contact you in any way to collect debt payments. Chapter 13 bankruptcy reorganizes eligible debt so that the debtor can make affordable payments and usually takes three to five years to complete.
Types of Debt Discharged
In Chapter 13 bankruptcy, debt that can be discharged includes car loans, credit card debt, utility bills, medical bills and other unsecured debt. In order for debt to be completely discharged, a debtor must commit to a payment plan and make consistent payments in exchange.
Benefits of Chapter 13
There are several benefits of Chapter 13 bankruptcy. Debtors can keep their property because Chapter 13 temporarily stops the foreclosure process. Filing for Chapter 13 bankruptcy also enables one to make their payments, such as for car loans or mortgages. Even if they don’t have all of their eligible debt eliminated, people who file for Chapter 13 have their debt significantly reduced.
No matter what kind of bankruptcy you may be eligible for, bankruptcy should always be considered as a last resort method of achieving debt relief. Learn more about Chapter 13 bankruptcy requirements by scheduling a consultation with a qualified lawyer.