Filing for bankruptcy is never an easy decision to make. Still, bankruptcy is often an effective way to enter a debt-free life. Chapter 13 bankruptcy, in particular, can offer a clear and direct path that encourages responsible financial decisions.
Deciding to file for Chapter 13 bankruptcy is a significant decision—one that could have an effect on you and your family for several years down the road. Therefore, this decision should not be made without skilled financial and legal guidance.
Before filing any type of bankruptcy, it is important to learn as much as possible about the process.
Understanding Chapter 13 Bankruptcy
According to Uscourts.gov, Chapter 13 bankruptcy involves a repayment plan that helps filers regain control of their finances. This chapter may be ideal for debtors with a consistent income, which determines the payment amounts and plan duration.
Unlike a liquidation plan, such as those in Chapter 7 bankruptcy, Chapter 13 allows filers to maintain their dischargeable and non-dischargeable assets. This is particularly helpful for filers who are struggling to keep up with mortgage payments but want to keep their home and avoid foreclosure. Or, it can assist avoid car repossession, or any other type of property repossession where you have suffered a financial setback.
Working with Your Payment Plan
A trustee will supervise the development of your repayment plan. The debtor must make the payments on time. Payment plans typically last for a period of about two to three years, depending on the total amount owed. Debtors are not allowed to take on new debt unless they receive trustee approval.
Bankruptcy is more than an opportunity to reach financial stability; it is also a chance to learn responsible financial habits. This is why bankruptcy applicants must complete a credit counseling session. These courses not only provide valuable information, but they also help you avoid similar mistakes in the future.
The laws surrounding bankruptcy are complex, and the best source of information and guidance is an experienced lawyer. If you are seriously considering bankruptcy and wish to speak with a skilled Cook County bankruptcy attorney, contact the Law Offices of Eric G. Zelazny to schedule your free consultation. We are available to advise you on your options and help determine the most effective course of action with regard to your particular situation. Call 708-888-2299 today.