Chapter 13 bankruptcy is important for struggling consumers, homeowners and others to understand. The importance of Chapter 13 bankruptcy protections to consumers cannot be overstated if they wish to enjoy debt relief but want to retain their assets, including a family home in some circumstances.
Chapter 13 bankruptcy protection can help those struggling with overwhelming debt and, in some circumstances, those struggling to keep their home. The Chapter 13 bankruptcy process allows the filing party to reorganize their debt and create a repayment plan that works for them and their situation. It is best for those who have a reliable source of income to repay their debts. The length of the repayment plan depends on the filing party’s average income for a period leading up to the bankruptcy and if it falls below the state’s median income, the repayment plan will generally be 5 years and if above, the repayment plan will generally be 3 years.
The repayment plan will be worked out with the help of the bankruptcy court and also approved by the bankruptcy court. Creditors are involved in the process so it is important to understand how, however, once the bankruptcy filing has been made, an automatic stay forces them to cease any and all collection actions while the bankruptcy process progresses.
The Chapter 13 bankruptcy process can help those feeling crushed by debt take a breath and enjoy debt relief. It can help with many of the concerns those considering bankruptcy face which is why it is essential for anyone who thinks they might be in that situation to understand that bankruptcy protection is there to help them and how it can do that.
