Bankruptcy is not the end. In fact, filing the right bankruptcy type enables you to have a fresh financial start. Chapter 13 bankruptcy allows you to do just that by giving you control over your assets while helping you pay off your debts.
Discussing Chapter 13 Bankruptcy with your attorney in Sandy is a must. To help you better understand the procedure, Utah Bankruptcy Pros cites some things you have to know before filing.
A stable income is a must
Chapter 13 Bankruptcy is also known as Wage Earner’s Bankruptcy or plan. This is because the debtor pays his debts every month from his salary. This payment is made to a trustee who will then distribute the payments to the creditors. As such, if you have a stable job and income, filing for Chapter 13 might be the better choice.
It is important to note, however, that under Chapter 13, paying for your debts should be done for a minimum of three years and a maximum of five. Anything less or beyond that is subject to discussion with your lawyer.
You have control over your assets
Another good thing about Chapter 13 is that debtors are allowed to keep their assets. A debtor’s assets are protected up to a certain amount. You can still keep assets beyond the designated amount, provided you will pay their values along with the plan.
Automatic stay protection
Once you file for bankruptcy, your creditors can no longer collect any payments or take any actions regarding your debt payment. This means repossession of your home and car are avoided; you can keep them while navigating your way through paying your debts.
Once you finish paying your debts, you need to attend a debtor’s education class before you can be fully dismissed from the bankruptcy list. This is the government’s way of ensuring that you will be able to manage your finances better and avoid falling into the bankruptcy pit twice.
You deserve a second chance to grow and manage your finances better. Talk to your attorney to learn more about Chapter 13 bankruptcy and see if it is the better choice.