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What is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy is often called “wage earners” bankruptcy. The name comes from the fact that to qualify for this type of bankruptcy, you have to be earning a steady monthly income. This type of bankruptcy is great for someone who is behind on house or car payments as it sets up a type of “payment plan” for you. If you’re earning a regular wage, but can’t seem to get your expenses in check, Chapter 13 bankruptcy could be a serious lifesaver for you.
DISCLAIMER: The following blog post is just advice, and you will be better served to call David S. Clark with your bankruptcy questions. This blog contains helpful tips and advice, but is not professional legal advice, and shouldn’t treated as such.
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When you file for Chapter 13 bankruptcy, you are given the opportunity to restructure your debts and repay them over a period of 3-5 years via a payment plan, or the Chapter 13 plan. Chapter 13 is often looked to as a reorganization of finances – it is not a liquidation of your assets. This means you are normally permitted to keep all of your assets whether they are exempt or nonexempt as long as you are a law-abiding citizen throughout your bankruptcy.
There are other qualifications for Chapter 13 bankruptcy. Your unsecured debt, which is debt not tied to any asset, cannot be more than $394,725 and your secured debt, or debt backed by collateral like a car or a home, cannot exceed $1,184,200. You must also be up to date on tax filings. You cannot have filed for Chapter 13 in the past two years or Chapter 7 in the past four years, and you cannot have filed for bankruptcy in the previous 180 days that was dismissed for reasons like failing to appear in court.
If you have decided to file for Chapter 13 bankruptcy, it is important to hire a qualified bankruptcy attorney. Chapter 13 is more complicated and drawn-out than other types of bankruptcy. If you miss a step while filing or incorrectly fill out a form your case could be thrown out completely or some of your debts may not be covered. Having the assistance of a bankruptcy lawyer like David S. Clark will assure that everything goes as smooth as possible.
At the end of Chapter 13, you will be discharged of most of your debts (Some debts may remain, like student loans). If you have a steady monthly income, but have gotten behind in some of your finances and feel like you can’t get it sorted out, Chapter 13 bankruptcy may be your answer. You get to keep your assets and create a payment plan that allows you to pay off your various debt. Contact a local bankruptcy attorney like David S. Clark to find your chance at financial freedom.
DISCLAIMER: The above blog post is just advice, and you will be better served to call David S. Clark with your bankruptcy questions. This blog contains helpful tips and advice, but is not professional legal advice, and shouldn’t treated as such.