Who Does Chapter 13 Bankruptcy Help?
People fall into debt for a variety of reasons. Sometimes it’s an overwhelming amount of credit card debt or medical bills that can, unfortunately, put an individual even further into debt. However, there are options that can ease your financial burden.
If you find yourself in a financial situation that you cannot manage, filing for bankruptcy protection may be your best option.
What Is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy is for individuals who are not eligible for Chapter 7 bankruptcy or who merely want to preserve assets or property that would otherwise be liquidated in Chapter 7. With Chapter 13, your debts are reorganized into a three to five-year payment plans. Chapter 13 typically takes between three to five years to complete. As long as you make the required payments, your debt is discharged by the court.
What Are The Criteria For Chapter 13 Bankruptcy?
There are specific rules regarding both you and the creditor which must be followed:
- You must have a steady income.
- You must have taken a credit counseling course.
- Creditors must cease all collection calls.
- If you are under foreclosure, it is halted, and back payments must be renegotiated.
- Unsecured debts must be under $383,175.
- Secured debts must be under $1,149,525.
How Is Chapter 13 Different From Chapter 7?
Chapter 7 is a shorter process and can typically be completed within just a few months. Chapter 7 is a good option for those who have a large amount of unsecured debt, such as:
- Credit card debt
- Medical bills
- Personal loans
- Payday advances
To file for chapter 7, individuals must pass a financial evaluation called the “means test.” Chapter 7 bankruptcy is not an option if you wish to keep your home.
An experienced bankruptcy attorney can arm you with the information you need to make an informed decision. The attorneys at Wadhwani & Shanfeld will guide you through each step so you can understand howbankruptcy can ease the burden of your financial situation. Being in debt can be very stressful and scary. Legal representation can help the process go much smoother. Call us today at (800) 996-9932 for a free case evaluation.