Eligibility and Reason for Filing Chapter 13 Bankruptcy?

The majority of debtors would rather file for Chapter 7 bankruptcy, which eliminates debt in four months without requiring repayment to creditors. But not everybody is eligible. Instead, los angeles chapter 13 bankruptcy attorney says that it is frequently used as a last resort by those with substantial incomes or those who wish to maintain important property.

Chapter 13 Eligibility

Not everyone ought to qualify for Chapter 13 bankruptcy. You will need to demonstrate to the court that you have the financial means to fulfill your payment requirements since Chapter 13 mandates you to utilize part or all of your income to settle your debt. The court may not let you petition for Chapter 13 if your income is too low or sporadic.

You are also not eligible if the overall amount of debt you have is too large. A “secured debt” is one that, if you are unable to pay your creditor, grants them the authority to seize a particular piece of property such as your home. The creditor does not have this authority in the case of an “unsecured debt,” such as a credit card debt or hospital bill.

Why File for Chapter 13 Bankruptcy?

• If you’re flooded with calls and letters, and fearful of losing your assets, filing for bankruptcy immediately stops those collection efforts. You have room to breathe.
• Debt can seem overwhelming; reorganization makes it more manageable, allowing you to see how you’ll pay off what you owe over a specific period.
• During your Chapter 13 bankruptcy process, interest does not accumulate on most of your debts.
• Concerned about dealing with those demanding creditors you’ve been speaking with for months?  Don`t be! Payments under Chapter 13 must be made to a trustee, who will subsequently divide them among the creditors.
• Chapter 13 permits an individual to retain their assets; that intermediary guarantees that you won’t have to deal with creditors directly. That is what makes Chapter 13 so lovely. Filing for this type of bankruptcy will suspend debt collection, allowing you to keep your property, car, and other secured assets.
  

To guarantee that a Chapter 13 plan is effective, an expert bankruptcy attorney can assist in outlining the procedure and drafting an appropriate plan. You owe it to your family and yourself to find out how Chapter 13 bankruptcy can help you keep your house if you are facing foreclosure.