Life can be unpredictable, especially in an economic downturn, but those struggling with debt still have options as set forth in the US Bankruptcy Code. While chapter 7 is for those without significant income or assets, chapter 13 is for people who can afford to make partial payments. If a person discovers that they can’t handle their debt at all, Rockville bankruptcy services can help them determine how to move forward. Below, readers can learn several important things about chapter 13 bankruptcy as it pertains to repayment requirements.
The Debtor Can Work with Creditors to Come Up with a Fair Payment Plan
When a borrower falls behind in making monthly minimum payments on credit cards and other unsecured debts, they don’t get to determine what type of repayment plan a collection agency or creditor offers during chapter 7 bankruptcy. However, in a chapter 13 bankruptcy, a debtor and their bankruptcy attorney can create a workable payment plan as long as the bankruptcy trustee approves it.
Chapter 13 Can Help Some Homeowners Avoid Foreclosure
If a borrower is in danger of losing their house through foreclosure, Rockville bankruptcy services may be beneficial. This type of bankruptcy stops foreclosure via an automatic stay, and it allows the borrower to establish a payment plan before they lose their home.
It May Reduce the Amount to Be Repaid During the Plan Term
Borrowers with unsecured debts such as credit cards may not have to fully repay them at the end of a three- or five-year repayment plan. According to bankruptcy law, as long as the borrower repays the amount the creditor would have received in a liquidation, the unsecured debts will be eliminated at the end of the plan. Consult a bankruptcy lawyer for advice on repayment arrangements.
Debt can be easy to get into and hard to get out of. If someone finds themselves in over their head, there’s no reason to be enabled. A person’s circumstances can easily change, and there’s no way to predict future earnings. When considering a chapter 13 filing, Rockville bankruptcy services can help. Visit Law-margulies.com to learn about the firm’s experience or call today to schedule a free initial consultation.
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