Hi there, I am Aiden Muzzel. I am well versed in bankruptcy proceedings, so I would like to share my knowledge with you through my site. I started my adult years with minimal knowledge of money management. As a result, I ended up way over my head in debt. I was working two jobs and paying all of my income to the debt accounts without making a dent in the total. It turns out I was simply paying late fees and interest with my funds. I sought out legal representation to learn more about how bankruptcy could help me end the cycle and start over. My bankruptcy attorney helped me fill out paperwork, file documents and attend court proceedings. Within a year, the judge discharged the eligible debt accounts. I hope to explore bankruptcy in more detail on my website. I hope you come back soon to learn more.
If you find that you are struggling to make your debt payments each month, you may wonder what options can help alleviate the financial strain of your payments. One solution is to file for chapter 13 bankruptcy. A chapter 13 bankruptcy is basically a type of debt consolidation plan that requires you to repay a portion of your debts over three to five years. Once you complete the payment plan, much of your remaining debt is dismissed.
In contrast, a chapter 7 bankruptcy requires you to liquidate your assets to pay off some of your debts; the remainder is then discharged, and there is no payment plan. Here are a few reasons why a chapter 13 plan may be right for your situation.
1. Chapter 13 Bankruptcy Permits You to Keep Your Assets
One of the main benefits to a chapter 13 bankruptcy plan is that it permits you to keep your assets. Instead of having to liquidate them and use the proceeds for repayment (what happens in a chapter 7 case), your bankruptcy trustee will use the value of these assets to determine the amount of your debts that you have to pay back.
Some assets that chapter 13 lets you keep are second homes, expensive collections, and valuable jewelry and clothing. In a chapter 7 case, the bankruptcy trustee would likely seize these items, sell them, and use the proceeds to repay some of your debts.
2. Chapter 13 Can Help You Temporarily Alleviate High Student Loan Payments
A drawback to taking out hefty student loans is that, in nearly all cases, these loans can not be dismissed by a chapter 7 bankruptcy. However, a chapter 13 bankruptcy can help you temporarily reduce the amounts of your student loan payments.
Instead of making payments to all of your creditors, you will make one monthly payment to the bankruptcy trustee. When determining the amount of your payment, the trustee considers all of your debts, including your student loans. In most cases, the portion of the student loan payment that you make in chapter 13 bankruptcy is significantly less than your actual payment. Upon completion of your chapter 13 plan, you must continue to make payments on your student loans.
3. Chapter 13 Bankruptcy Lets You Pay Your Attorney's Fees Over Time
Many individuals are reluctant to file for bankruptcy because they do not have enough cash to cover the cost of hiring an attorney. However, with a chapter 13 plan, attorney's fees are not a problem: the plan permits you to include the amount that you owe for bankruptcy lawyer services in your monthly chapter 13 payment.Share
19 March 2018