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Chapter 13 bankruptcy provides relief in many situations

When the struggle to pay bills and keep food on the table becomes too great, Connecticut residents may explore options for debt relief. If alternatives for consolidating loans or avoiding creditors have failed, bankruptcy may be the best solution. Those who have a steady income will likely consider Chapter 13 to get their finances under control. Chapter 13 has several advantages over Chapter 7 liquidation bankruptcy.

In Chapter 7, it may be necessary to liquidate one's assets, sometimes including the family home. The money from liquidation is then used to pay the debts owed. However, Chapter 13 halts any foreclosure on one's home and allows the filer to continue making payments under an adjusted plan. Likewise, other secured debts may be rescheduled, their payments extended over the life of the bankruptcy. This often lowers the payments allowing the filer to more easily keep up.

Through Chapter 13, the filer submits a monthly payment (or has the payment directly deducted from his or her payroll) to a trustee, who pays the creditors an agreed-upon amount. This relieves the filer from having to deal directly with creditors. Making payments on time is crucial, since missing a payment may result in the dismissal of the bankruptcy or the liquidation of assets. At the end of the payment plan, usually three to five years, if the filer has met all obligations, the filer may be eligible for having the remaining debt discharged.

State laws concerning Chapter 13 differ and change rapidly. For this reason, the assistance of an attorney with experience in Connecticut law is beneficial for anyone considering the bankruptcy process. An attorney can help determine which type of debt relief is most appropriate for one's circumstance.

Source: uscourts.gov, "Chapter 13 - Bankruptcy Basics", Accessed on July 15, 2017

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