Macco Law Group, LLP

Chapter 13 bankruptcy may offer repayment options

Chapter 13 bankruptcy may offer repayment options

Debt burdens can be overwhelming and stressful in the daily lives of many individuals. The potential good news is that personal bankruptcy options are available to help individuals struggling with debt to enjoy debt relief. In addition, there are different types of personal bankruptcy for different circumstances and situations both with the goal of allowing the filing party to enjoy a fresh financial start.

A change in the economy can impact individuals who have a regular, good, job just as it may impact others who are struggling financially. A Chapter 13 bankruptcy, or “wage earner” bankruptcy as it is sometimes described, is designed to help individuals with regular income restructure their debts so that they can be repaid. Debts that may have become overwhelming can be restructured into a payment plan the filing party follows to repay debts and enjoy relief from their debts and the stress associated with them.

Additionally, in some circumstances, a Chapter 13 bankruptcy can also help with some of the most significant concerns the filing party may have, including losing their family home or wage garnishment. Creditor harassment may also be a significant concern for a party considering filing for bankruptcy. A temporary stay is put into place when the filing party files for bankruptcy which prevents creditors from pursuing collection actions during the bankruptcy process. Additionally, because both debts and creditors are addressed in the repayment plan, Chapter 13 bankruptcy may help with creditor harassment concerns in multiple ways.

A Chapter 13 bankruptcy may also help protect nonexempt assets that the filing part may worry will be sold during a Chapter 7 bankruptcy process to repay debts; provide time to repay debts that cannot be discharged in bankruptcy such as child support, tax debts or student loans; and may be available to individuals who are seeking debt relief but do not qualify for a Chapter 7 liquidation bankruptcy. Because there are different personal bankruptcy options available for individuals who have found themselves in different financial situations, it is important to be aware of the different options and ways to qualify and the debt relief options personal bankruptcy may provide.