Chapter 13 bankruptcies are often referred to as the “reorganization” chapter of bankruptcy. When someone files under this chapter, they do so in hopes of restructuring their debt payments while still being able to maintain possession of their property. This allows financial obligations to become more affordable and easier to pay over a longer period of time, and possibly to reduce the amount you owe.
How it Works
It is worth mentioning that Chapter 13 cases last longer than filing a bankruptcy under Chapter 7, taking around 3-5 years, as opposed to Chapter 7’s three months to complete. The benefit of this, however, is that it grants filers far more time to catch up on their debts.
Chapter 13 provides the filer the chance to restructure their current debts and extend the life of their payments to make them more affordable. With a new and improved plan, filers make their new monthly payment to a bankruptcy trustee.
As long as payments are upheld, filers under Chapter 13 are able to fulfill their obligations to set themselves up for long-term financial success at the conclusion of their case.
Who Qualifies For Chapter 13
In order to be eligible for Chapter 13, you need to have a steady income, as well as a certain amount of debt that does not exceed a specified limit. These amounts are adjusted periodically to reflect changes in the consumer price index, but they do not change much.
Adversely, if you don’t have enough debt or your income is too high, you may not qualify for this chapter.
If you are unsure if you qualify for bankruptcy under Chapter 13, get in touch with one of our experienced attorneys today online or give us a call at (203) 774-3332!
Benefits of Chapter 13
There are many benefits to filing a Chapter 13 bankruptcy that are unavailable to filers of other chapters. Some of these benefits include:
- Maintaining possession of property - As opposed to Chapter 7, where property with a value that exceeds exemption limits could be liquidated, Chapter 13 generally allows you to keep all of your property. This includes your car, furniture, home, and various other personal properties.
- Halting foreclosure - Chapter 13 allows you to repay your mortgage debts through a new and more affordable payment plan so you can keep your home if you are behind.
- Protecting from creditors - Once the bankruptcy papers are filed, all debt collection efforts on behalf of your creditors are immediately stopped during the bankruptcy process, finally giving you the breathing room you need to focus on your finances.
- Affordable payments - Chapter 13 allows you to set a monthly payment plan that actually works for your specific financial situation as long as it receives the court’s approval. All of your debts may not even need to be repaid, as your remaining debt can possibly be discharged once the payment plan is completed.
Chapter 13 bankruptcies give you the ability to get back on your feet without forcing you to liquidate your assets and lose everything that you have worked so hard to gain. As an affordable alternative to going into financial ruin, bankruptcy can help you take control of your finances again.
Contact Law Offices of Jennifer LaRese, LLC to Get the Help You Need
Our team is committed to providing you with sound legal advice and a personalized approach to your case. Over the past decade-plus, our team has helped many clients apply a tailored approach to personal debts, and we want to do the same for you. We can help evaluate your situation, work with creditors, and help you fight for justice if they have committed creditor harassment.
To learn more about our debt services in Southbury, call to schedule your complimentary consultation.