Chapter 13 bankruptcy is a very popular choice for individual debtors who do not qualify for Chapter 7 bankruptcy. Chapter 7 bankruptcy tends to be a very popular option since the entire process takes around six months, and debtors benefit from debt discharges. However, debtors will only qualify for Chapter 7 bankruptcy if their income is very low in comparison to their debts. Additionally, you will almost certainly lose your home as a result of filing for Chapter 7 bankruptcy.
If you do not qualify for Chapter 7 bankruptcy, or if you want to ensure that you can keep your home, Chapter 13 bankruptcy may be the best option for you.
Who can qualify for Chapter 13 bankruptcy?
Those who have a stable, healthy and regular income are best suited for filing for Chapter 13 bankruptcy. In order to qualify, the individual debtor's unsecured debts must be less than $394,725. It is not possible to file for Chapter 13 bankruptcy if you have received credit counseling from an approved agency in the past 180 days.
How does Chapter 13 bankruptcy work?
Chapter 13 bankruptcy makes it possible for debtors to halt all creditor activity. This enables them to reorganize their debt into a realistic repayment plan that takes into account their income and expenses. Upon completion of the repayment plan, the debtor may benefit from a debt discharge.
If you are struggling with overwhelming debts and you have a steady income, you should look into filing for Chapter 13 bankruptcy. A bankruptcy filing requires commitment, but on completion, you will be able to enjoy a life free of debts.