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Bankruptcy Chapter 13: Is it Worth It?


Declaring bankruptcy is a feasible option for individuals struggling with debt and those overwhelmed with making payments for what they owe. Given its complexity, knowledge of bankruptcy law is necessary before proceeding with a Chapter 13 declaration of bankruptcy.

A Chapter 7 consumer bankruptcy is preferred by some since it is usually shorter than a Chapter 13 bankruptcy case. Credit card bills, medical bills, and other unsecured debt would likely be discharged under a liquidation bankruptcy proceeding. Despite the long and tedious bankruptcy process, however, a Chapter 13 personal bankruptcy can tremendously help you with repayment efforts.

If you are considering bankruptcy under Chapter 13, the first step you must take is to talk to a trusted local attorney. If you have decided to push through and file for bankruptcy, you will have to do a series of consultations with your bankruptcy lawyer and credit counselor.

Bankruptcy attorneys can help refine your reorganization plans, document your eligibility to the trustee, and explain how bankruptcy proceedings can stop foreclosure or repossession of personal property. He or she will also help you fill out bankruptcy forms and paperwork, and eventually come up with a repayment plan that will allow you to repay secured and unsecured debts.

Bankruptcy lawyers can also assist as you attend the meeting of creditors and submit the payment plan to the bankruptcy court for Bankruptcy Chapter 13approval. 

Bankruptcy laws can be quite complex. A Chapter 13 petition for bankruptcy has a monthly income requirement, and as such is sometimes called the wage earners bankruptcy. Individuals who go bankrupt and are considering this filing chapter must first meet certain requirements before they can declare bankruptcy.

A bankruptcy filing, regardless of chapter, will stay on your credit report for several years. It will affect your credit score and ability to get credit after bankruptcy. Despite this, filing bankruptcy under Chapter 13 can help tremendously with debt settlement and restructuring. Your repayment period, which can last for three or five years, comes with bankruptcy protection from the federal court. 

On top of enabling you to stop wage garnishment, foreclosure, and repossession, filing for bankruptcy can prevent lenders and debt collectors from harassing you through the automatic stay. A creditor of a debt that was included in the bankruptcy discharge cannot even contact the debtor who opted to file bankruptcy.

This specific bankruptcy petition will allow you to keep your home, car, and other personal property. The restructuring involved can also enable you to start or continue paying off student loans, child support, alimony, or criminal fines you owed, as these are generally non-dischargeable.

Bankrupt individuals seeking debt relief and a fresh start at life should seek legal help from a trusted bankruptcy law firm. If you have questions about filing for bankruptcy, give us a call. Contact us at Grafton Firm, LLC to consult with a hands-on bankruptcy attorney.

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