Unfortunate economic times can fall hard on people who have huge debts to pay off. Filing a bankruptcy case means a debtor is not left with any way to repay his creditors. This is the ultimate step that an individual can take under such tough situations. Bankruptcy cases are the intricate legal proceedings that relieve a debtor of his huge debts either by liquidating his non-exempt assets or reorganizing them.
Next, you want to determine the type of bankruptcy that you want to file. The two types that are useful for personal or small business are chapter 7 or chapter 13. In chapter 7 all debts are discharged, meaning erased, except for those that you want to keep.
Chapter 13 option under the bankruptcy code involves restructuring of debts that allows a debtor to repay his debts with whatever income source he has. It is applicable for people who have a proper income and are in a position to apply for adjustments.
After filing chapter 13 bankruptcy, a debtor is required to decide on a repayment plan within 15 days. He needs to attend all the important creditor meetings that follow after that. As and when the court approves your repayment option, the bankruptcy process will start.
Let us look at the main advantages of a chapter 13 bankruptcy. Court protection – Once a debtor has lodged a chapter 13 bankruptcy, he will be granted protection by the court from the debt collection agencies and the creditors. That means it is illegal to contact a debtor after he has been granted the chapter 13 petition.
The final step before creating your petition and filing for bankruptcy is to gather all of your documents. The things you need before filing are your tax returns, two years for a Ch. 7 and three years for a Ch. 13, 6 months of pay stubs or proof of income, certificate of pre-bankruptcy credit counseling and your bank statements.
Elimination of foreclosure – A major benefit of chapter 13 bankruptcy is that it eliminates the chances of a foreclosure. A proper repayment plan can be implemented to clear any arrears.
Are you down with mounting debts and thinking of filing a chapter 13 bankruptcy? Riverside dwellers can hire expert and professional attorneys at Miller and Associates, PC.
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