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Chapter 13 Bankruptcy

If you have been thinking about filing for bankruptcy, it’s important to get all the facts before making such a huge financial decision. Chapter 13 bankruptcy could help you get back on your feet if you’ve experienced financial hardship, but the steps you’ll need to take are crucial in determining your success. 

This procedure should be carefully considered for the purpose of helping you to repay your debts in a timely and efficient manner, so you should be thinking about long term goals when you talk to a lawyer or debt collection agency about chapter 13 bankruptcy. This procedure is also referred to as a wage earner’s plan, since you will need to have regular income that is garnished automatically each month to help you take better care of your financial obligations.

Although many people are afraid of the term ‘bankruptcy’ and view this procedure as a bad thing, there are some advantages of chapter 13 bankruptcy. For instance, you can save your home from foreclosure under this clause (as opposed to filing chapter 7 bankruptcy), but you will have to make sure that your mortgage payments are on time during the process in order to keep your home and avoid further debt. You can also reschedule your payment plans to certain companies under chapter 13 bankruptcy, which means you will have more time to put together a financial plan that works for you, so that you won’t repeat some of the same monetary mistakes.

It is very likely that you are eligible for chapter 13 bankruptcy, even if you are self employed. Your debts can not be more than $307,675 (unsecured) or $922,975 (secured). Most people fall into this category, so if you know that you have been receiving bills that are extremely difficult to pay for one reason or another, it may be time to contact a lawyer to see if bankruptcy is the right decision for you.

This procedure has helps many people secure their financial futures, but before you make this move, you should try to create a financial plan for yourself, or make an appointment with an accountant who will show you exactly what you owe, and which financial obligations are more of a priority. Living within your means will also help you to avoid chapter 13 bankruptcy; an upgrade houses or cars should not be considered unless you have a few month’s worth of living expenses saved up and reserved for emergency use only. You should also avoid having too many credit cards, and save a percentage of each paycheck you receive, no matter how many other bills you have.

For more information on chapter 13 bankruptcy, visit The US Bankruptcy Courts.