When declaring bankruptcy, one of the major decisions you will have to make is whether to file Chapter 7 or Chapter 13 bankruptcy. These are two of the most common types of bankruptcy because they are available to individuals, and each has unique advantages and disadvantages. But today, we’ll be going over Chapter 13 bankruptcy and what you need to know about it.
Chapter 13 bankruptcy, also referred to as wage earner’s bankruptcy or repayment plan bankruptcy, is intended for individuals and sole proprietors who make enough to pay some of their debts but also need some assistance. Unlike Chapter 7 bankruptcy, which requires you to liquidate non-exempt assets to resolve your debts, Chapter 13 bankruptcy helps you deal with your debt without giving up your assets. More specifically, it allows you to submit a repayment plan that protects certain assets, like your house or car, from foreclosure.
This repayment plan will span from 3 to 5 years, depending on your income, family size, and other factors. Once you have made the necessary payments on time during the course of the plan, any remaining debt at the end of the 3-to-5-year period will be canceled (with some exceptions).
Filing for bankruptcy is a major decision that you shouldn’t make without consulting professionals. If you need a bankruptcy lawyer to inform you about what Chapter 13 bankruptcy will mean for your situation and then file it for you, contact us at Arnold Law Offices. Our law firm focuses primarily on bankruptcy law, and we have significant experience in this area. Our offices are located in Pell City and Talladega, Alabama.