Chapter 13 bankruptcy provides opportunity for long-term debt relief
If you are like many Georgians facing financial difficulties, you have probably considered bankruptcy, but have not yet taken the step of contacting an Atlanta attorney to talk about your situation. Learning more about the benefits of bankruptcy while dispelling the numerous bankruptcy myths is often the first step people need to put your financial house back in order.
Chapter 7 and Chapter 13 bankruptcy are the two most common forms of bankruptcy for people with debt. While both have their advantages, Chapter 13 bankruptcy is a practical solution for individuals trying to save their homes from foreclosure or cars from repossession.
Overview of a Chapter 13 bankruptcy
Chapter 13 bankruptcy is designed for individuals who have stable, consistent income. Steady income can be used to cover reasonable living expenses and make payments in a Chapter 13 repayment plan.
Chapter 13 plan payments are paid to a bankruptcy trustee over a three to five year period. Each plan can be structured to meet the needs of the individual. Money paid into the plan pays not only those debts that may need to be covered, such as mortgage arrears; past due taxes; and car loans, but may also include a percentage of unsecured debts, such as credit card bills and medical bills. Any portion of these unsecured debts that is not repaid in the Chapter 13 repayment plan will be discharged at the completion of the Chapter 13.
Like Chapter 7 bankruptcy, Chapter 13 bankruptcy offers protection from creditors. Once the bankruptcy has been filed, the automatic stay protects people in Chapter 13 bankruptcy throughout the case. It is illegal for creditors to attempt to collect payments during this time.
Benefits of Chapter 13 bankruptcy
Chapter 13 bankruptcy offers a number of benefits in addition to protection from creditors. For homeowners trying to save their house, Chapter 13 is invaluable because it can be used to stop foreclosure and catch up on mortgage arrears.
Having trouble making your hefty auto payment? Car loans can also be incorporated into the plan, extending the payments during the period of the bankruptcy, which often lowers the monthly car payment.
One of the biggest benefits of a Chapter 13 plan is having debt payments consolidated without having to negotiate directly with creditors Individuals make a monthly payments to the trustee who then distributes money to the creditors.
Finally, Chapter 13 bankruptcy makes bankruptcy available to those who may not otherwise qualify for a Chapter 7. Households whose income exceeds the median family income established by the Census Bureau may not qualify for Chapter 7 bankruptcy. For these individuals, Chapter 13 is an excellent option.
Learn more by speaking with an Atlanta bankruptcy attorney
If you are interested in finding out more information of how a Chapter 13 can help you relieve your financial stress you should speak to an experienced Atlanta bankruptcy attorney. An attorney can meet with you to evaluate your situation and give you choices for getting back on your feet.