What Does It Mean?
In Chapter 13 bankruptcy, your assets are safeguarded because you repay a substantial portion of your debts over time. During the three to five year period, you will pay a trustee, who will then pay your creditors. During that period, certain loans, such as auto loans and tax debt, will be repaid in full. Credit card debt is typically repaid marginally, frequently as little as one percent. Unlike total liquidation bankruptcy, this form allows you to keep your assets rather than liquidating them to pay back your creditors. This is what makes this form so essential.
Who Requires It?
Many individuals will benefit from filing Chapter 13 bankruptcy as opposed to other forms. If you are a married couple or an individual who owns a substantial quantity of assets, such as homes, vehicles, or other valuable assets, this form may be the best option for you because none of those assets will be lost. Those who are experiencing financial hardship but cannot file Form 7 due to income limitations can also benefit from this form. In some instances, individuals prefer this form because it allows them to escape debt while continuing to make payments.
In brief, Chapter 13 is a method of debt reorganization. If you are in foreclosure, encouraging lenders to revise your mortgage can be helpful, but you must still catch up on payments to avoid foreclosure. It can help you retain your car and protect you from adverse judgments. It will also prevent creditors from contacting you, as they will be unable to do so.
All of these factors are cumulative. Chapter 13 brings you back on track. If you are struggling under a mountain of debt, you do receive the new financial start you need. Using this form instead of others will protect your residence, vehicles, and other assets from being lost during the bankruptcy process. You must labor to repay a significant portion of your debt, but for many people, this is an essential solution.""
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