Facing the possibility of bankruptcy is overwhelming. However, it’s more common than you may realize. According to the United States Courts, over 278,000 Chapter 13 bankruptcy petitions were filed in 2019. Chapter 13 bankruptcy is a smart way to alleviate the burden your debts may be having on you and your future.
For nearly 30 years, we’ve advised clients in Fayetteville, Fort Smith, and the Arkansas River Valley on their financial paths. Let us help you on your journey as well. Contact Bond Law Office today to schedule a free consultation regarding your debt relief options with Chapter 13 bankruptcy.
What is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy allows individuals with a steady income to create a plan to repay all or part of their debts. In exchange for debt relief, filers of Chapter 13 bankruptcy must pay their discretionary income to their creditors over the course of a three- to five-year repayment plan. During this allotted time, creditors are forbidden from starting or continuing collection efforts.
When is Chapter 13 Bankruptcy a Good Debt-Relief Option?
Filing for Chapter 13 bankruptcy is a wise option for those who earn a significant income or want to protect valuable property. It differs slightly from Chapter 7 bankruptcy, which is typically utilized by individuals with little income remaining at the end of each month and minimal assets. Chapter 13 bankruptcy is meant for those whose largest dilemma is dealing with creditors’ demands for immediate payment, not lack of income.
What Does Chapter 13 Bankruptcy Do?
Chapter 13 bankruptcy allows filers to catch up on missed mortgage, car, and nondischargeable priority debt payments. By making installments to creditors over a three- to five-year period, filers are able to safeguard their assets from repossession or foreclosure.
What Doesn’t Chapter 13 Bankruptcy Do?
Like every other type of bankruptcy, filing for Chapter 13 bankruptcy will not erase all your debts. Dischargeable debts must be paid in full as part of your payment plan. If they are not, the total balance will remain at the end of your bankruptcy case.