4 Things To Know About Chapter 13 Bankruptcy

If your bills are simply more than you can pay, you may want to consider filing for a Chapter 13 bankruptcy. This can help lower your monthly payments and take some of the financial stress off of you. The key to being successful in achieving this legal status is to understand some specifics of it. Knowing certain things about filing for this type of bankruptcy can prepare you in advance.

The Requirements

You must have a job and show proof of your income before you will be able to file for a Chapter 13 bankruptcy. There are also debt limits that you must meet before being successful in filling.

For secured debt, you must not have more than $1,149,525 that you owe and for any unsecured debt you have, this amount must be less than $383,175 for you to qualify for this legal status.

The Credit Counseling

You must take a counseling course that will help you better handle your debt in the future. This class must be on that has been approved by the U.S. Trustee's office. You can visit their website to help you find a class that is approved.

It's likely that you may be charged a trustee fee, but the required courses are typically offered free of charge.

The Repayment Time

This specific type of bankruptcy will allow you up to five years to repay your loan. This makes this type an ideal choice if you need more time to pay your creditors.

Additionally, you will receive a repayment schedule for the court system that will list your exact amount of payment each month and the date it's due.

The Benefits

There are many advantages of filing for a Chapter 13 bankruptcy, and some of these are listed below:

  1. Your credit score will not be negatively affected because you agree to pay the debt.
  2. You will be allowed an automatic stay which will prevent your creditors from taking legal action against you or attempting to seize your property.

Finally, life can bring about a number of challenges that can make repaying all of your creditors impossible to do. By being proactive and filing for this type of bankruptcy before your financial status gets out of hand, you will be ahead of the game. Be sure to rely on the expertise of an attorney like Brent Sorenson & Associates, P.C. who specializes in bankruptcy to help guide you through this process.