Is Chapter 13 Bankruptcy the Right Option for You?
When it comes to the financial aspects of your life, one of the toughest decisions to make is filing for bankruptcy when it becomes apparent that you are slipping further down into an abyss with debts mounting and income sources drying up fast. Bankruptcy is a good option to consider because it allows you to reorganize yourself and make a fresh start.
What Are Your Options?
Filing for bankruptcy can affect your future credit and your reputation. You might not be able to get loans for some time in the future. However, it can provide you with that much-needed peace of mind as the stressful and threatening calls communications from your creditors stop. It can improve your quality of life considerably in the short term. At the same time, it is important to know which type of bankruptcy is right for you in the present circumstances. Your options are Chapter 7, Chapter 11, or Chapter 13.
What Is Chapter 13?
Chapter 13 bankruptcy is a common type of bankruptcy available for individuals with an income inflow that allows them to strictly follow the repayment plan drawn up with mutual consent with the creditors. If you want more information and advice on this type of bankruptcy, consult a leading chapter 13 bankruptcy lawyer, Maryland.
Chapter 13 bankruptcy is the best option for individuals caught in a debt trap, as it can provide them immediate protection from all types of recovery moves from creditors. This type of bankruptcy helps them set up a debt repayment plan while ensuring that their key assets remain protected from liquidation. The fundamental condition is that you must have a fairly substantial income to repay the creditors regularly as per the plan drawn up in consultation with your Chapter 13 bankruptcy lawyer Maryland and other affected parties.
How Does Chapter 13 Bankruptcy Work?
- It is a form of a consolidation loan in which you are required to make a monthly payment to a court-appointed trustee. The trustee is in charge of distributing the money to your creditors.
- Your Creditors cannot reach out to you directly. They can only contact you through the appointed trustee.
- Your ownership of your property remains unaffected.
- You get a fair amount of time to pay off debts.
- Secured debts such as car loans may be restructured. You can expect an extension of the loan period throughout the Chapter 13 repayment plan. This can help lower the monthly payments substantially.
Not every debt-ridden individual can qualify for Chapter 13 bankruptcy. There are specific qualifying norms for the same. You can discuss your present financial state with the best chapter 13 bankruptcy lawyer northern Virginia to know if this plan can work for you.
A key restriction of the many that Chapter 13 bankruptcy carries is that you may not incur any more debt without seeking the approval of the court. If you are holding liens against any major assets, you must mandatorily have insurance coverage over those assets. Your Chapter 13 bankruptcy lawyer Maryland will be the best person to answer all your queries about the subject so that you can take a measured decision about filing for Chapter 13 bankruptcy.