Back to Basics: Chapter 13 Bankruptcy

David S. Clark takes you “back to basics” with a breakdown of Chapter 13 bankruptcy

Bankruptcy can be a daunting word, but it can also be the best way to regain financial control. If you’re an Opelika or Auburn, Alabama resident and seeking an escape from the weight of overwhelming debt, here is a quick and easy breakdown on Chapter 13 bankruptcy from David S. Clark, a Chapter 7 and Chapter 13 bankruptcy attorney in Opelika, Alabama. 

What is Chapter 13 Bankruptcy?

Often referred to as a “wage earner’s plan”, Chapter 13 bankruptcy is a chapter of personal bankruptcy that allows individuals with an income to establish a plan to repay all or parts of their debt. This functions differently than Chapter 7, which involves liquidating certain assets, like a house or car, to pay off debts. Essentially, Chapter 13 allows you to keep your property and assets while consolidating your debt into monthly payments, typically over the course of 3 to 5 years. 

How Does Chapter 13 Work?

Before moving forward with Chapter 13 bankruptcy, it is essential to find a Chapter 13 bankruptcy attorney who understands your unique financial situation. Furthermore, a local Alabama bankruptcy lawyer will understand the often complex nature of bankruptcy, providing you with valuable information, encouragement, and help. 

So how does it work? Ultimately, when you file for Chapter 13 bankruptcy in Opelika, the process begins with a petition to the bankruptcy court. This is also where you must provide a detailed financial report that includes your assets, liabilities, income, expenses, and a proposed repayment plan.

As mentioned above, the repayment plan typically lasts between three to five years, with the exact timing depending on your income level. During this time, you will make monthly payments to a dedicated bankruptcy trustee, who then distributes the funds to your creditors according to the court-approved repayment plan. 

Who Qualifies for Chapter 13 Bankruptcy?

Unfortunately, this question isn’t as simple as it may seem. Bankruptcy is a complicated and unique option for every individual struggling with debt. So, it is crucial to talk to your dedicated Chapter 13 bankruptcy attorney about your options, and if you qualify for those options before moving forward. 

Benefits of Chapter 13 Bankruptcy

Filing for Chapter 13 bankruptcy in Auburn or Opelika, Alabama offers several key benefits:

1. Asset Protection: Unlike Chapter 7, you can keep your home, car, and other assets while repaying your debts over time.
2. Debt Consolidation: Chapter 13 consolidates your debt into one monthly payment, simplifying your finances and providing much-needed relief. 
3. Foreclosure Prevention: Chapter 13 stops foreclosure proceedings, allowing you to catch up on your mortgage.
4. Reduced Creditor Harassment: Once you file for bankruptcy, an automatic stay is put in place, preventing creditors from harassing you or attempting to collect debts.

Is Chapter 13 Right for You?

Much like the rest of this blog, this question requires time and effort to figure out. Yet, don’t be intimated by it! You don’t have to walk through this process of reaching financial freedom alone.

In conclusion, Chapter 13 bankruptcy is a powerful tool for those who are committed to repaying their debts but need more time or flexibility. David S. Clark is a bankruptcy attorney who not only understands the need for that flexibility but strives to fight alongside you. 

If you’re searching for a Chapter 13 bankruptcy attorney in Opelika, Alabama, look no further than David S. Clark. Ready to get started? Reach out to David S. Clark today!