Filing Chapter Thirteen Bankruptcy
Bankruptcy can offer filers a new start. The bankruptcy options available can wipe out debt or create a reasonable, managable payment plan. Choosing to file for bankruptcy is a very effective means of getting back on your financial feet. However, it should be taken seriously. Financial experts often agree that this step should be considered only as a last resort.
There are two main bankruptcy options available to the consumer. Chapter 7 bankruptcy, also known as liquidation, and Chapter 13 bankruptcy which is a repayment plan.
Chapter 7 bankruptcy can be considered when you have no disposable income after paying living expenses. If a chapter 7 discharge is granted, your creditors cannot collect payment from you. If so, you are given the opportunity to start over with a clean slate. Keep in mind though that property that is not exempt in a chapter 7 can be sold to pay off some or all of your debts.
Filing a chapter 13 is more complicated. If you want to keep all of your property, chapter 13 should be considered. Probably the biggest benefit to filing Chapter 13 bankruptcy is that it can stop a foreclosure on your home. You must have income and commit to making monthly payments to the bankruptcy court that are then paid to your creditors. Statistics show that only 30% of people who file ch 13 bankruptcy complete their payment plans.
Whether you choose ch 7 or ch 13 bankruptcy, your petition must be completed truthfully. Trying to hide assets or income is a against the law and can result in your bankruptcy being dismissed and charges brought against you. A bankruptcy dismissal can cost you a lost more financially and legally. There are a lot of resources online to learn more about bankruptcy including free bankruptcy forms and bankruptcy forums for advice.
