Debt Repayment
Unlike the debt forgiveness of a Chapter 7 bankruptcy, Chapter 13 allows you to restructure your debt. The bankruptcy option allows you to save your home or car by extending the repayment plan over a few years. The court approves the debtor’s repayment plan which includes the length of the plan, designates a trustee to handle the funds and how that person receives funds. Payments on unsecured debts may see a reduction and possible balance forgiveness. Unfortunately, priority debt such as child support still requires full payments.
Bankruptcy Eligibility
The amount of money you make determines the repayment plan the court grants which can be between three and five years. The court does require that you have a regular stream of income to qualify. The court will want to see any financial documents, including tax returns. You may be denied depending on your past bankruptcy history.
To see if a Chapter 13 bankruptcy is right for you, speak to a bankruptcy attorney for additional details. While bankruptcy is not free, it can help you overcome crushing debt.