Consulting with a Chapter 13 Attorney

Even with the best of intentions, people sometimes find themselves unable to honor their financial obligations. When there seems to be no other answer, they begin to consider the possibility of filing for bankruptcy. By choosing to consult with a Chapter 13 Attorney, it is possible to determine if this type of court protection will be enough to allow the individual to still pay off those debts and eventually become debt free.

What is a Chapter 13 Bankruptcy?

In many ways, this particular form of bankruptcy is somewhat like a debt reorganization plan. When approved, the debtor is placed under the protection of the court. Creditors no longer apply interest to the outstanding balances, and no further attempts are made to collect on those debts. That includes no more collection calls to the home or to the debtor’s place of employment. Instead, the court assumes control of the repayment process. This is done by developing a specific plan for repaying the outstanding debt. The court then garnishes the wages of the debtor and distributes the collected funds to the creditors according to the approved plan. Care is taken to make sure that the debtor is left with enough money to manage expenses like food, clothing, and shelter. In many cases, this type of plan will have the debtor account settled in full in a matter of two to three years.

Why Choose This Approach?

As the Chapter 13 Attorney will explain, not everyone qualifies for a Chapter 7 action. The latter action effectively dismisses all the debts filed with the court. However, if the court has reason to believe that the debtor could pay off his or her debt with the aid of a reasonable repayment plan, then Chapter 13 will be the best approach. The attorney will help the client understand what this type of bankruptcy accomplishes. On the plus side, it brings an end to all collection attempts, which allows the client to focus his or her energies on other tasks. A down side is that obtaining credit while settling a Chapter 13 is extremely difficult. This is because this type of bankruptcy action can be amended to include new creditors over time. Get more information here!

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