Learning Basic Facts About Chapter 13 Bankruptcy
Chapter 13 bankruptcy plays a very major role is assisting debtors pay part of their debts to creditors through their monthly income. The debt can be repaid for a period ranging from three to five years depending on the verdict given by the court and also the applicant’s financial condition and eligibility.
There are many advantages that come along with this provision. One of them that sticks out so prominently is the fact that a home facing foreclosure can be saved. The chapter contains provisions for the restraining of a fore closure as well as the handling any past mortgage repayment tussles. Debtors are also given an opportunity for the repayment of their debts that are could have been accrued during the period in which the bankruptcy was declared.
The program helps a great deal in bringing down monthly payments at a very high rate. This also ensures that the cosigner of the debt is in no way affected by the process. The provision works as a consolidated loan so that the debtor can repay the debt to the trustee without going directly to the creditor. This is followed by the distribution of payments to these creditors once they payment has been made.
This means that the debtor does not have to face the creditors and this is what helps in being relieved of financial struggles. A debtor can file for the provision without the help of a legal expert if one is an expert. This is a gesture that is not encouraged because the process involves some complex stages that one might be able to go through without an expert in this area. Making some mistakes at this stage can end up causing grave consequences both financially and legally.
The debtor is not required to give up assets while under this provision but there are some situations that would require one to liquidate some assets for the payment of part of the debt. It is however important to note that in most cases the debt is paid off over time through the monthly plan. The provision also allows for some exceptions to the filing in some cases.
The provision however does not take care of all kinds of debts but cater for such as tax debts, government fines, child support and student loans. Major debts are usually not covered under this chapter. One of the benefits of this plan is that it prevents the debtor from being harassed by creditors.
It is important to notify creditors of the situations as this is what causes the automatic stay to have its effect. This means that creditors have no right to seize any of the debtor’s assets or cause any kind of discomfort. This could be in form of disgusting phone calls, lawsuits, wage garnishing and many others.
The debtor is cushioned by chapter 13 bankruptcy in the sense that the retirement savings are not interfered with although it is good to check what the law says in the state of residence. This can be achieved with the help of a qualified lawyer who is able to provide advice on the process.
Before you file for bankruptcy, make sure you check Sam’s informative website on Filing For Chapter 13 Bankruptcy, and if you should you file for bankruptcy.