You are now fully aware that you are nearing bankruptcy, what will you do? Know your options by reading about chapter 13 bankruptcy rules.
If you are an individual with a regular source of income, you can develop a plan to repay your debts in a three to five year period by paying monthly or bi-weekly through the Chapter 13 Bankruptcy which also known as reorganization bankruptcy.
But before you can file for bankruptcy, you must receive credit counseling from an agency approved by your country’s Trustee’s office. These agencies are allowed to charge a fee for their amenities, but they must provide reduced or even free counseling if you cannot afford to pay.
Another qualification for this type of bankruptcy declaration is that, the repayment scheme you are proposing should show that you have a salary income with “disposable income.” Disposable income is the change from your basic necessity requirements such as food and utilities. This will go to pay your unsecured debts like credit card and hospital expenses.
What are the advantages of filing chapter 13 bankruptcy? First and foremost, chapter 13 bankruptcy is found to be a more sound choice of people who are desperately looking for relief from their financial problems but at the same time, not prepared to lose all their properties. Since the debtor is given a chance to re-organize his finances, he has time to come up with a viable payment plan. Good for the debtor since he can propose something he knows he can deliver.
Having said that properties are not completely lost in this bankruptcy type, the debtor gets to keep most priced assets he owns. The inherited house of the family will not be sold off to pay for his debts, like in the case of a chapter 7 bankruptcy. This is an important advantage of chapter 13. One can keep valuable properties with the chance of not losing anything at all.
Remember not to plunge on filing bankruptcy without making sure the rules it covers are fully understood. Many times, debtors fall trap to emotional stress and they just want to get things over with by liquidating their assets not knowing that there’s chapter 13 – a better and more practical option to take.
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