Could Chapter 13 Bankruptcy protection be right for you?

Bankruptcy isn't just a legal solution to get rid of your oppressive medical debt.  A Chapter 13 Bankruptcy allows you the freedom to restructure your debts and keep most of your property as you pay back the amount that you have fallen behind over time.  For example, if you are $5,000 behind on your mortgage, and your lender has stopped accepting payments so that each and every month you just fall further and further behind.  This cycle can stop through a Chapter 13 Plan.  The bankruptcy can help you pay back that $5,000 over a five year plan, less if you can afford more, all the while your mortgage company accepts the regular monthly payment.   A Chapter 13 allows people the breathing room to pay back the debts they owe, on a schedule that fits their budget.

A Chapter 13 Bankruptcy provides the benefit of the automatic stay, the court order that stops your creditors in their tracks from repossessing your car, foreclosing on your home, or garnishing your wages.  But a Chapter 13 also puts you in the driver's seat for negotiating the terms of repayment on debts you have defaulted.  This type of bankruptcy can help homeowners who have multiple years of back property taxes, while preventing a tax sale of their home.    A Chapter 13 bankruptcy will provide relief from an otherwise insurmountable debts.

The court requires that Debtors in a Chapter 13 pay into the Bankruptcy court as a monthly Plan Payment even to cover the back due amounts owed that they want to cure, a fee to the trustee who monitors the plan, and a percentage payment to the unsecured creditors, like credit cards and medical debt.  While the Debtor and their attorney propose a Plan to the court for approval, both the creditors and the Trustee can object to how the Plan is structured, so it must be balanced.

A successful Chapter 13 will still discharge your unsecured debts that are otherwise eligible for discharge in a Chapter 7, but it allows you the flexibility to restructure your finances while you get the fresh start that the Bankruptcy Code intended.  Filing for Bankruptcy is a big step.  Financial problems tend to impact every area of your life, and bankruptcy can help you reclaim control over your finances.

If you want further information about whether bankruptcy is right for your family, call the office to schedule your free consultation today.  Or follow the link below to find further information about Chapter 13 Bankruptcy that the Courts have provided for educating the public about bankruptcy.

http://www.uscourts.gov/about-federal-courts/types-cases/bankruptcy-cases