Chapter 13 bankruptcy: Check this overview to know more

Just because you made a few erroneous financial decisions, you don’t have to lose everything you own. If you have accrued debts and cannot repay your creditors, Chapter 13 bankruptcy could be an option. When possible, it is best to negotiate with creditors and come up with a repayment plan without restoring to bankruptcy. Bankruptcy is a huge financial decision and will affect your credit reports for years to come. Yet, it could be a reliable tool for debt relief for many people. Working with the right Hagerstown, MD bankruptcy attorney can help evaluate the pros and cons of your decision. In this post, we are sharing a few basic details about Chapter 13 bankruptcy. 

The basics

If you have a stable source of income and can repay your debt with some flexibility, Chapter 13 bankruptcy may help your circumstances. In other words, when lack of income is not a concern, this could be an option to consider. Chapter 13 bankruptcy allows you to retain a considerable number of your assets, including your house, provided you can repay the debts. You will get a repayment plan for the next three to five years, and you can sort your finances accordingly. You can prevent foreclosure if that seems impending. 

Contact an attorney

If you are unsure of your decision or need an expert opinion on the current financial mess, talking to a bankruptcy attorney can help. They can evaluate various pros and cons of Chapter 13 bankruptcy for your unique situation and guide you on the process. They can also explain your rights and an overview of various debts that can be discharged. Note that Chapter 13 bankruptcy doesn’t get rid of all debts. You will still have to repay some debts, including unpaid federal/state taxes, child support, alimony, and student loans. Most of your unsecured loans can be discharged, including credit card dues and personal loans. Your lawyer can guide you on the process, which can be complicated. They will also handle the paperwork that can take considerable work.  

How is Chapter 13 bankruptcy different from Chapter 7?

If you file for Chapter 7 bankruptcy, you will have to agree to liquidate your assets to repay the creditors, and you cannot discharge some debts we mentioned. There is no repayment plan involved. Chapter 13 bankruptcy allows more flexibility, especially when your income is stable. Chapter 13 bankruptcy can take more time than Chapter 7. Legal fees for Chapter 13 are also higher, and you should have a concrete plan to manage your finances. 

One type of bankruptcy is not better than the other – It depends on your situation and needs. 

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Created on Sep 28th 2021 02:30. Viewed 243 times.

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