How Does A Bankruptcy Chapter 13 Work?
When you are facing the prospect of filing for bankruptcy, a Chapter 13 can sound like a dream come true. You get to keep your assets and discharge some of your debts. In a Chapter 13 Bankruptcy there is always a payment plan that will allow you to catch up on some of your missed bills over time. I’ve seen what are called “zero percent” bankruptcy plans, “lump sum” plans and other “step up” plans. But ultimately you need to realize that you are paying some of your creditors back in the chapter 13 plan.
You or your bankruptcy lawyer write up the plan and then creditors can object to it. A chapter 13 trustee oversees the plan and makes sure it complies with the law or the chapter 13 trustee will object to the plan.
Basically, a Chapter 13 Bankruptcy is for individuals who have regular income and want to pay off their debt over time. It allows you to keep your property and pay off creditors a portion of what they are owed each month until the debt is paid in full. The court determines what you'll need to pay every month by looking at your income, reasonable expenses, and secured debts (debts for things like a car or house). If the amount you owe is more than what you earn, some creditors may receive less than 100% of what they're owed at first. But after you've made payments for three or five years (depending on how much debt you have), depending on how much money is left over each month after reasonable expenses, secured debts will be completely paid off while unsecured debts such as credit card bills will be partially paid off based on how high your priority level is with each creditor.
Bankruptcy is scary, but you don't have to be scared. I always recommend that you speak with a bankruptcy lawyer. Ascent Law is a bankruptcy law firm that can help you. Give them a call and tell them you would like a free bankruptcy consultation and they’ll give you one:
Ascent Law LLC
8833 S Redwood Rd Suite C
West Jordan UT 84088
(801) 676–5506
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