Bankruptcy can happen to even the most conscientious people. Sometimes an unanticipated expense can force a person into claiming bankruptcy. However, if you find yourself in this circumstance, you can erase the financial slate clean and start keeping your financial obligations up to date.
When you file Chapter 13 bankruptcy as opposed to Chapter 7 bankruptcy, you are filing a plan for reorganization of your debts. On the other hand, Chapter 7 bankruptcy is a liquidation filing. Therefore, Chapter 13 filings are indicated for debtors who wish to keep an asset such as a car and/or home. The debtor normally has the financial means to continue making payments, thus reestablishing the original loan agreements.
How a Chapter 13 Filing Can Help
Under a Chapter 13 bankruptcy plan, a debtor normally proposes repayment of his or her debts for three to five years. As a result, you can use this form of a bankruptcy filing to prevent foreclosure or catch up on mortgage or car payments that are overdue. You can also initiate the filing to pay any back taxes you owe or keep non-exempt property that is considered valuable.
In a Chapter 13 bankruptcy proceeding, it is important to follow the terms of repayment. If you do, all your dischargeable obligations will be released at the conclusion of the repayment plan. The amount you are required to repay is contingent on your disposable income. This income is normally determined through a means test in Illinois.
Are You Behind on Your Mortgage?
When it comes to making a choice between a Chapter 13 and Chapter 7 bankruptcy filing, Chapter 13 is the one to make if you fall behind on your mortgage. By taking the route of reorganization, you can keep your property and reinstate your mortgage contract after a period of time.
You can learn more about the filing process by contacting Smith Law, LTD in Charleston, IL. Call the firm today at 217-345-6222 or toll-free at 800-232-1325. For experienced legal representation, count on the service of a bankruptcy lawyer to make sure that your bankruptcy case is handled competently. You can pay visit to their Facebook page for latest news and updates
