Explaining the Chapter 13 Bankruptcy Process

Chapter 13 Bankruptcy Lawyer

If you are looking into filing for bankruptcy, you may have heard the term Chapter 13. This is an option for those looking to repay their debts while ensuring their assets are protected in the long-term.

Here our attorneys explain the Chapter 13 bankruptcy process so you are completely informed when it comes to your financial life and security.

What is Chapter 13?

Chapter 13 bankruptcy is when a person uses their income as leverage to repay their loans while being protected from creditor harassment. Known as the repayment option, you will work with your creditors and lawyers to create a debt repayment plan that can last between three to five years.

This option will also not discharge your debts. By choosing this option, you are still responsible for paying all of your back taxes, student loans, child support, credit card bills, etc. You will use your income as leverage to create a payment plan that works for you while ensuring you have enough income to still pay for necessary life expenses.

However, keep in mind that If you miss a bankruptcy payment, your creditors have the right to file for a dismissal of the bankruptcy proceedings. This is because the idea behind filing for bankruptcy means that you are legally required to stay up-to-date with payments and the creditors get paid back on time.

Chapter 13 and foreclosure

Many people think that filing for bankruptcy will ruin their standing with their home. This is untrue, as this option may even be a good method for those who find themselves in hot water when it comes to their mortgage payments.

When you file for Chapter 13, an automatic stay will be triggered, meaning the mortgage lender must accept these conditions and you cannot be forced out of your home. Through this option, you are able to pay back your late mortgage payments during your repayment plan, but keep in mind that this is on top of your current monthly payment.

Financial  automatic stay

On top of the automatic stay that is put in place to ensure you can stay in your home, an automatic stay will be triggered to stop the creditors from attempting to collect any kind of debt. This means that they cannot contact you, all existing debt lawsuits must cease, and your assets including your income will be saved from impending seizure.

How do I file for Chapter 13?

It is important to know that there are different rules for bankruptcy proceedings from state to state. However, it is federally mandated that anyone who is considering filing for bankruptcy must take credit counseling prior. Then, you will speak to a lawyer and provide the court system records of your income, your debts, expenses, and the number of creditors you are dealing with.

From there, you will be put in contact with a trustee who will basically be put in charge of ensuring your case is completed adequately.

If you are considering filing for bankruptcy, speak with an attorney today. They will consult you on the best decision for you and your financial future, while helping to navigate the sometimes complex world of bankruptcy law.

Source: Chapter 13 Bankruptcy Lawyer Clearwater, FL, Law Office of Michael A. Ziegler, P.L.

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