No one plans to let debt overwhelm them. Most of us have every intention of paying our creditors. But sometimes life intervenes. It may be a lost job or a demotion that has you struggling to make payments. Or it could have been a medical emergency you had no way of foreseeing. Regardless of the reasons, if you find yourself getting calls and letters from creditors and you see no way out, you may be considering filing for Chapter 13 bankruptcy.
Chapter 13, unlike Chapter 7, allows you to keep your property in exchange for agreeing to a repayment plan. Depending on whether your income is more or less than the state median, you will have a five or three-year plan, and you will need to fulfill the following obligations:
- First, you'll need to file all the proper paperwork, including a certificate showing that you completed credit counseling.
- Second, you'll be responsible for paying a filing fee.
- You'll then need to start making payments according to your plan. This will mean paying certain debts in full, including things like child support, taxes and wages owed to employees.
- Finally, in order to fulfill the obligations of Chapter 13 bankruptcy, you'll need to stick to the plan and continue to stay current on your payments.
Of course, there may be times where you need to get a modification because of a life event like the loss of a car or a decreased income. For help with modifications or the filing process, it might be a good idea to speak with an attorney who specializes in bankruptcy.