Do You Know If Chapter 13 Bankruptcy Is Right for You?

Bankruptcy can help you get out of debt and finally find peace of mind. But do you know which type of bankruptcy is right for you? As an individual, you have two options for bankruptcy: Chapter 7 and Chapter 13.

If you have a regular income, have a home or car that you want to save, or just need some more time to pay off your debts, a Chapter 13 bankruptcy could be best for you.

In a Chapter 13 bankruptcy, you create a repayment plan to pay off your debts. Each month, you pay part of your monthly income to a bankruptcy trustee, who distributes this money to your creditors. The rest of your income is for you to pay for your normal living expenses, like food, transportation, clothing, and medicine. Your repayment plan will last from three to five years. A Chapter 13 repayment plan may also let you reduce the amount that you owe, so you only pay back a percentage to creditors in the plan.

Because you are repaying your debts under a Chapter 13 plan, you don’t have to give up much of your property. A Chapter 13 bankruptcy can allow you to stop foreclosure, get caught up on your mortgage payments, and save your home.

To qualify for a Chapter 13 repayment plan, you must have a regular income, and your unsecured debts must not go over a certain limit.

Fortunately, if you find yourself in financial trouble soon after completing your repayment plan, you can file again: there is no waiting period after a Chapter 13 bankruptcy to file for bankruptcy again.

The type of bankruptcy that works best for you depends on your unique situation, including your source of income, the amount of bills you have, and more. Because bankruptcy can be complicated–and deciding which type to file can be confusing–it helps to have an experienced attorney on your side.

At Wallace Spalding Law Office, we help individuals like you determine the best way to end their financial worries, whether that is Chapter 13 bankruptcy, Chapter 7 bankruptcy, or an alternative. We’ll work with you throughout the entire process, giving you the advice you need to get out of debt while keeping as much of your property as possible.

Call or email us today to learn how one of our experienced, understanding Louisville bankruptcy lawyers can help you.