Chapter 13 Bankruptcy: Wage Earner’s Plan
It’s impossible to know what the future hold. While a cliché, this sentiment is far from untrue. Life can be very unpredictable. Majority of the U.S. population that suffered financial woes during the economic downturn could not have predicted that they will be facing such challenges. And yet this has been the reality for the last couple of years. Many people across America are struggling with financial concerns caused by unemployment, crippling debt, and other unforeseen scenarios. Fortunately, those in similar situations can find some kind of recourse by filing for bankruptcy.
Bankruptcy is a legal option provided to individuals that find themselves in difficult situations that prevent them from paying off their debts and other financial obligations. By the end of the bankruptcy process, a U.S. federal court can grant an individual’s debt to be discarded. Otherwise, the court can call for a debt repayment plan to be imposed. All in all, bankruptcy is an option meant to help individuals to regain some control and stability with their finances.
Chapter 13 Bankruptcy is a specific option available for financially burdened individuals. As defined in the U.S. Bankruptcy code, this type of bankruptcy allows the court to decide on a structure of a payment plan accommodating the petitioner’s current income. This gives the petitioner the ability to pay off their debt through regular installments over the period of three or five years. This structure has plenty of advantages. The benefits of Chapter 13 bankruptcy include protection from creditors, being able to retain properties (including real estate), and having less impact on credit score as compared to a Chapter 7 bankruptcy.
Not all petitioners will be found by the court to be eligible for a Chapter 13 bankruptcy. For that, it’s important that individuals looking for financial relief keep close communication with an experienced legal professional.