Chapter 13: Understanding Your Options
Chapter 13 bankruptcy is much like Chapter 7, but you are not forced to liquidate all your assets. Many of the same reasons filing for a Chapter 7 bankruptcy may be appropriate also apply to Chapter 13, including the chance to get credit card debt and debt collectors off your back, but it can also be good for folks facing foreclosure or some other legal suit.
Chapter 13 requires a debt repayment plan like a Chapter 11 that must be submitted to the bankruptcy court. It describes how you intend to pay off your debts, over a three-to-five-year period. You may get to pay off that debt for as little as 10 cents on the dollar.
The goal with Chapter 13 Bankruptcy is to give you a fresh start. If you have a strong desire to pay off your debts but, due to a loss of job, disability, or other personal crisis, can no longer afford to make regular monthly payments, this may be the right choice. Filing for Chapter 13 bankruptcy can give you relief from high interest rates, late fees and the penalties that keep piling up each month, so you can finally catch up and even get ahead.
Chapter 13 is much simpler than Chapter 11 and follows a similar process to Chapter 7. The difference is, you will need to have a clear plan for paying off the debt in three to five years, and you must prove that you cannot pay the actual debt amount. Creditors will need this proof if they are going to take only a small percentage of what is actually owed to them.
If you meet the agreed-upon repayment schedule, then you will receive a discharge, which means creditors can no longer seek payment thereafter. You will have been released from further obligation to pay.
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There are advantages and disadvantages to filing for Chapter 13 bankruptcy. When filing for bankruptcy, it is essential to do it right the first time you file. If there are errors and the bankruptcy court dismisses your petition, you will have to wait several years before you can file for this form of debt relief.
Contact our experienced bankruptcy professionals at Brown & Associates Law & Title, P.A., to discuss your legal options. Call our office in Tampa at 813-289-8485 or send us an email to arrange for a free consultation.
Brown & Associates Law & Title, P.A., is a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.