When you want to get out from under the weight of debt, bankruptcy can help. However, what if you do not want to liquidate your assets to do so? Fortunately, there is another avenue for personal bankruptcy that may allow you to keep most of your assets.
Chapter 13 bankruptcy offers qualified individuals and couples an opportunity to restructure their debt and eventually wipe it out.
What does Chapter 13 bankruptcy do?
You may have hit a rough patch that forced you to make hard choices and give up paying some of your bills on time. For instance, an unexpected medical event or job loss may have set you back and prevented you from remaining on time. Chapter 13 is a way that you can get back on solid ground and rid yourself of some of the debt through a negotiated payment arrangement.
A trustee can negotiate with debtors and reach a reasonable monthly payment that you can afford. The payment plan lasts anywhere from three to five years. If you make all of your installments, the judge may discharge any remaining debt from your record and close the bankruptcy proceeding.
What is eligible under Chapter 13?
Chapter 13 allows you to keep personal property even if you are behind on the payments, such as your home and your vehicle. These along with federal debts and back child support factor prominently into the payment plan. While you do not have to pay these items off, you do have to get back on a reasonable payment schedule. Chapter 13 can help you do that. Unsecured debts, such as credit cards, take a backseat to the ones mentioned above.
Bankruptcy may prove a viable option in getting your financial life back together.