Chapter 13 Bankruptcy: What it is, and How it Works?

If you are a debtor with a regular income, the chapter 13 bankruptcy can help you cope with the situation. If you are a resident of New York, the Kingston, NY chapter 13 bankruptcy attorney can help you with your case. First, let’s walk through some basic information about chapter 13.

Who should file a Chapter 13 bankruptcy?

Bankrupt people think that they are on the verge of financial ruin. If you are going through the same phase, nothing can be worst, but it is not the end of your life, and hope is still left. The federal system has a bankruptcy code, Chapter 13, that offers the last thing you can do to make a soft landing. If you are bankrupt but have a regular income, chapter 13 may help in organizing the debts, and a program is set up to pay them. As long as you meet the requirement plans that the bankruptcy court lays down, you can keep your house under chapter 13 bankruptcy.

Chapter 13 and the way it works 

You must ensure that the reorganization plan you submit safeguards certain assets from repossession or foreclosure. Be it chapters 7, 13, or 11, no bankruptcy filing, forgive all debts. Also, you must beware that alimony payments, student loans, child support, or other taxes are not dischargeable. Yes, bankruptcy can abolish other debts, but in that case, you will not be able to borrow in the future. 

However, to qualify for Chapter 13, you should not be filed for chapter 7 for four years or chapter 13 for two years. You must have a regular and steady income and be up to date on tax filing. 

What are the pros of Chapter 13 bankruptcy?

When it comes to the advantages of Chapter 13, it buys you time to repay your debt to the court. After you are charged with bankruptcy, it protects your loan co-signers from collecting the amount if the bank obligates you to repay the debt yourself. In case you need to file a second bankruptcy, Chapter 13 has a waiting period of two years compared to Chapter 7, which has eight years. If you have already filed Chapter 7 bankruptcy, you can also file chapter 13. It also ensures reductions on whatever remainings are there from Chapter 7 discharge.

As of now, you are aware of everything about chapter 13, and if you feel that you are in any such situation, don’t delay in getting in touch with a bankruptcy attorney. 

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