How a Chapter 13 Payment Plan Helps Your Finances

When you take into consideration the Chapter 13 bankruptcy law, it is easy to see why this type of bankruptcy can help anyone to work out problems and achieve the financial control necessary. Those who file Chapter 13 have income and the means to repay most of the debt. However, the goal of this type of bankruptcy plan is to reorganize that debt to make it easier to repay. With the aid of an attorney, the process of filing Chapter 13 bankruptcy is easier and can be more successful.

How Bankruptcy Can Help

Under Chapter 13 bankruptcy law, individuals have the ability to ask the court to help them to reorganize debt to make it easier to pay. This process accomplishes a variety of benefits for the filer, including allowing him or her to get better control of their finances, especially in the long term. Nevertheless, it is critical to understand what Chapter 13 bankruptcy can do for your finances.

• Chapter 13 bankruptcy can stop foreclosure, until a solution is obtained. Individuals can file Chapter 13 and then work with the lender to reorganize the debt to remain in their home.
• Under Chapter 13 bankruptcy law, individuals do not lose assets. Those who have a significant number of assets are often able to get the best protection under this law.
• Most secured debts and priority debts are paid off within the bankruptcy process, except for a home loan. This means that within three to five years, most debts will be paid off.
• Some types of debts, including some types of unsecured debts like credit cards, can be discharged. Under the law, the creditor must receive at least what it would have received had the borrower filed Chapter 7 bankruptcy.
• Most people are able to have far fewer debts after filing Chapter 13 bankruptcy than when they started the plan.

All of these details help individuals to get more of the debt under control and paid off while also working through the process of building a strong credit score. While individuals will have limited access to credit and it is likely that the individual will have a significant payment to make each month towards this debt repayment plan, most will be out of debt faster.

Getting Legal Advice

To get the most out of Chapter 13 bankruptcy law, work with an attorney. The attorney will offer guidance and information to help ensure your bankruptcy goes smoothly.