Get Out Of Debt By Qualifying Chapter 13 Bankruptcy Plan:
Personal bankruptcy is usually filed as Chapter 7 or Chapter 13.
Chapter 13 bankruptcy is a repayment plan wherein the debts are gradually paid over three to five years. People file chapter 13 to save their home from foreclosure and stop creditors harassment.
What is the basic difference between Chapter 7 and Chapter 13 Bankruptcy?
According to Chapter 7 bankruptcy rules, it wipes out all the debts but it’s available only for a specific financial problem. Chapter 13 bankruptcy needs a person to pay some of his debts over certain period of time.
Above all, chapter 13 bankruptcy is a repayment plan, wherein the debts are not totally erased but they are spread over three to five years of time, according to the court approved plan.
What is a debt reduction plan?
In a debt reduction plan, an outside firm consolidates the debts into one single monthly payment which the debtors have to make, which in turn is paid to the creditor. The debt reduction plan is very similar to a debt consolidation plan and its less expensive than filing bankruptcy still people prefer to file bankruptcy over it, below given are the reasons why?
Why do people wish to file chapter 13 bankruptcy?
- Chapter 13 bankruptcy avoids foreclosure
- The cosigners are protected in chapter 13 bankruptcy
- Creditors cannot harass people in chapter 13 bankruptcy
- The debtor has to communicate only with the court and not with the creditors
- The debtor’s debt is not increased.
Filing chapter 13 bankruptcy on one’s own is very complex and thus the assistance of consumer bankruptcy attorney is needed.
About the Author
Attorney Adam Peck has been practicing law since 1981. A former successful business owner, Mr. Peck initially focused his legal career on business law. Within the first three years, after some colleagues and friend’s parents endured nursing home neglect and elder abuse, he continued his education to begin practicing elder law and nursing home abuse law.