Each year, many people find themselves drowning in debt with no idea how they plan to pay it back. However, it’s important for these consumers to realize that the federal government has provided a way for them to relieve this financial pressure and get a handle on their bills. Filing for bankruptcy can give people a chance to wipe out or reorganize their debt so that their dire financial situation can finally be resolved. For those who want to hold on to their property and figure out a way to repay their creditors, it’s likely that a chapter 13 petition will be the best choice. However, it isn’t advised that a person goes this route without talking to an attorney first.
Read on to find out why this recommendation is in place.
• Many people don’t even realize that there is a qualification process for each type of bankruptcy petition. When it comes to chapter 13 bankruptcy, debtors will be required to provide proof that they have the income level necessary to develop the required creditor repayment plan. If they do not pass this “means test”, they may find that they will not be eligible to file for this type of bankruptcy. Talking to an attorney first can help debtors avoid wasting their time and money filing a petition that is unlikely to get approved.
• Chapter 13 cases are also notoriously complicated. While a chapter 7 bankruptcy takes three to six months to close because it simply wipes out a person’s debt, chapter 13 bankruptcy takes about five years to resolve because they require that a debtor work with their creditors and a bankruptcy trustee to create a debt repayment plan. An attorney will explain the rules that must be followed in regard to which creditors receive priority and help ensure that the debtor creates a plan that is likely to get approval from the court.
Filing for bankruptcy of any type is a major decision that should not be taken lightly. Because it is a legal matter, debtors should always seek the advice of an attorney before taking any steps toward completing or submitting a chapter 13 petition. Visit website to learn more about how having an attorney present throughout the case can ease frustration and help give consumers more peace of mind.
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