4 Vital Things To Know About Chapter 13 Bankruptcy

Posted on: 2 July 2020

Have you had all you can take with your financial situation? Do you need relief from your debts? Many people find themselves in this situation, and a lot of these individuals turn to Chapter 13 bankruptcy for relief. If you are considering bankruptcy, it is helpful to understand how it works before using it. Here are four vital things you should know about Chapter 13 if this is an option you are considering.

It Requires Repayment of Debts

Chapter 13 differs from other forms of debt-relief services in one primary way. It requires the repayment of debts. When you file the documents for a Chapter 13 case, your lawyer will work with you and the trustee on a repayment plan. The repayment plan is the system you must follow if you use Chapter 13, and it tells you how much you must pay to the trustee each month. Your program might last for five years, and you must follow it. You will have to repay your debts through this branch of bankruptcy.

It Might Allow a Discharge for Some Debts

There are times when Chapter 13 provides a discharge for some debts. The primary thing to know is that you will not receive the discharge until you complete it. If your plan lasts for five years, you will not receive a discharge until the five-year period ends. At the completion of your program, the trustee will evaluate the debts you still owe. If any of the debts qualify for a discharge, the trustee will grant it.

It Lets You Keep Your Assets

The third thing to know about Chapter 13 is that you do not have the risk of losing your things. A Chapter 13 case lets you keep your assets in most situations. If you cannot keep an asset, you will know before you file, and you can determine if you want to proceed with the case.

It Stops Foreclosures and Repossessions

The last thing to know is that this is the only branch of bankruptcy that stops foreclosures and repossessions. You cannot find this perk through other debt-relief programs. If you want to stop one of these events from occurring, using Chapter 13 might be your answer.

Do you have questions about the branches of bankruptcy you can use? If so, contact a bankruptcy law firm. You can talk to a lawyer over the phone or set up an in-person visit with one.

To learn more, contact a lawyer about Chapter 13 bankruptcy.