There are different types of bankruptcy, and two in particular that I specialize in: Chapter 7 and Chapter 13. These two kinds are available so that filers are able to determine the best course of action suited to their financial circumstances. While I’ll be focusing here on Chapter 13 bankruptcy, you can read more about Chapter 7 here. To put it plainly, the biggest difference with Chapter 13 is that with this type of bankruptcy, you agree to pay back some debts, as opposed to discharging them all within the filing.
So, you might be asking, how does it work?
Deciding that Bankruptcy is Right For You
Really where it all starts is with making the decision that bankruptcy is right for you. You may still be unsure of what debts will be included or if some can be at all, but making the decision sets you on the course. The purpose of bankruptcy is to provide relief from overwhelming financial burdens, which cause stress for individuals, families, and businesses. The relief often sets in the moment you decide to file and realize you are on the path to your fresh financial start.
Finding an Attorney
Bankruptcy is a complex process, so it’s vital to have a seasoned expert help you through it. You’ll want to work with someone who believes in the value of the bankruptcy process and has seen folks through it time and again. That’s what I do, with over 20 years of experience as an attorney, I can help you navigate filing for bankruptcy with ease. I even offer a free initial consult to explore your options and put your mind at ease. During this consultation, we’ll discuss your types of debt, types of income, as well as assets, to determine which is the best course of action.
Repayment Plan
The things that make Chapter 13 different are that the filer submits a payment plan that includes some of their debts, it is is based on their budget, and it is paid over a three to five year period. Often there is a misconception that all of your debt needs to be repaid this way, but that’s not true. You maintain the payments according to your plan, and once it is complete, all remaining debts are discharged.
Why Chapter 13?
If you are found ineligible for Chapter 7 bankruptcy, you may still find that Chapter 13 will work for you. A part of determining whether you’re eligible for Chapter 7 in which all debts are discharged is income. It is possible to be swamped with unruly debts, even with a significant or healthy income. If your income is too high to file for Chapter 7, you may be eligible still for Chapter 13. This type of bankruptcy can also help you avoid the loss of certain assets that may not be protectable in Chapter 7. There are also certain debts that cannot be included in that type of bankruptcy filing that can be in a Chapter 13 filing, such as child support arrears and income tax debts. This type of filing may also be suited to you if you have already filed Chapter 7 within the past eight years.
As you can see, there is a lot to consider when filing for Chapter 13 bankruptcy, but it’s certainly not anything to be afraid of. It’s especially approachable with an experienced bankruptcy attorney such as myself. I would be happy to assist you in considering and filing for bankruptcy. Contact me for a free initial consultation today at 651-454-0007