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Tags: finance, bankruptcy, bankruptcy
 Are you contemplating to file bankruptcy? But before you can declare bankruptcy, you will first seek counseling. In credit counseling, there are chances that you will be prevented from filing bankruptcy. If the counseling can’t really help your financial crisis, then go ahead and file. There are many kinds of bankruptcy like Chapter 7, 11, and 13.
The most ideal of the three is the last. In Chapter 7, it will lead to selling all of the debtor’s assets in order to generate money to settle all the debts. On the other hand, Chapter 11 is somewhat similar to Chapter 13 which only requires reorganization but it is considered as the most expensive of the three.
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So, let’s talk all about Chapter 13 bankruptcy for you to gain knowledge. If you can qualify to file for this kind, this article will surely help. Chapter 13 bankruptcy also known as Wage Earner Plan enables individual with regular income to develop a well-made plan on how to repay all of its existing debts.
There is no need to liquidate all the properties to pay off debts. There are certain qualifications to be met before you can file. You must first pass the MEANS test. The test will figure the income and expenses and will determine whether Chapter 7 or 13 is suitable for you.
If the money left by subtracting the expenses from income is more than the income median of the state where you reside, then Chapter 13 bankruptcy is for you. After you have qualified, you can now file to the bankruptcy court within your state. You must submit to the court the necessary documents such as schedule of assets and liabilities, schedule of income and expenses, statement of financial affairs and others.
The court will appoint a trustee to handle all the debtor’s assets. The trustee will be in-charged in paying all the various creditors. The money to be paid will come from you but you don’t need to face your creditors this time. All transactions will be done according to the court’s order and must be strictly followed.
A form called Official Bankruptcy Form should be filled out correctly and completely. The information contains the list of all creditors, the amount and the nature of the claims; list of the debtors entire property; the sources of income and lastly the list of the debtor’s monthly expenses. The repayment plan must also be filed subject to the court’s approval.
If the plan is approved, you should adhere to it. The plan includes paying all your creditors but in much lower amount. You don’t need to pay the total amount- only certain percentage of the entire debt will be paid. The significant advantage of Chapter 13 bankruptcy is to prevent foreclosure of your home.
Your property will be saved and you won’t worry about a place to live in. Another thing is you’ll be given a chance to repay all your debts but in a longer time. That would mean lower monthly payments on your part. Chapter 13 bankruptcy gives hope for people with so many debts to overcome their financial dilemma and lead a debt-free life in the future.
About the author
The author of this article Rick Goldfeller is a successful underground Financial Analyst who has been advising and coaching individuals for many years. Rick recently published a book on how to manage your money and attract Wealth and Financial Freedom. More info on his Finance Planning course is available HERE.
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