Why Is Chapter 13 Bankruptcy the Best Option to Eliminate Debts?

Posted by: Justin M. Myers | On Jan 04, 2018

Feeling overwhelmed by debt isn’t an uncommon occurrence, plenty of people both here in Salt Lake City and beyond, have been there for various reasons. If you currently feel like you’re out of your depth and are barely treading water, you may be considering bankruptcy as a possible solution. As an experienced attorney will tell you, Chapter 13 bankruptcy can be a far less painful option that you may think.

Is Chapter 13 Bankruptcy a Good Option for Me?

Chapter 13 bankruptcy may be appropriate if you’re struggling with immediate demands for payments, rather than a lack of income per se. You may think that bankruptcy involves hitting rock bottom financially, but that’s not always the case. With Chapter 13 bankruptcy, you can get a little breathing space from creditors’ calls and letters, while using your disposable income to reduce unsecured debts. Another great feature of Chapter 13 bankruptcy is that you may even be able to keep your house, assuming you’re able to keep up with mortgage payments under your settlement plan. As financial circumstances can vary hugely from person to person, a Salt Lake City Chapter 13 bankruptcy attorney can advise if this is a suitable route out of your debt.

Although your lawyer will explain in more detail how your case will proceed, Chapter 13 bankruptcy generally involves:

• 3 to 5 years to pay off your unsecured debts using disposable income
• Opportunity to catch up on missed mortgage payments, and continue paying through a settlement plan
• Supervision of a court-appointed trustee, who’ll take charge of your payments
• Safeguard your assets against repossession or foreclosure. Any proceedings currently in motion will be halted when you file for Chapter 13 bankruptcy

To qualify for Chapter 13 bankruptcy, you must have no more than $394,725 in unsecured debts and/or $1,184,200 secured debt. You must also:

• Not have unsuccessfully filed for bankruptcy in the past 180 days due to unwillingness to appear in court
• Agree to start credit counseling with an approved provider within 180 days
• Propose a repayment plan
• Work with a trustee, who takes responsibility for your payments to creditors
• Not work as a stockbroker, commodity broker, or be filing as a business or sole proprietor

Why Is Chapter 13 Bankruptcy the Best Option to Eliminate Debts?

If you’re one of the Salt Lake City residents struggling with debt, your first step should involve contacting an experienced Chapter 13 bankruptcy attorney for advice. Your lawyer can give you a free evaluation, as well as an estimate of the costs involved in filing for bankruptcy. You can expect to pay $235 filing fee to the bankruptcy court, plus $75 miscellaneous admin fee.
The information you’ll need to provide to your Chapter 13 bankruptcy attorney includes:

• A full list of all creditors, as well as the current amount owed to them
• Full details of your income and where it comes from
• Details of any property you own
• Any contracts or leases which exist in your name
• An accurate record of your monthly outgoings and expenses
• Your most recent federal tax bill, along with details of any unpaid taxes owing. You must be able to prove your taxes are in order for the past four years

Not all forms of debt can be cleared with bankruptcy, including Chapter 13. You’ll still be liable for any student debt, unpaid taxes, child support, or alimony payments.

When you attend your consultation with an experienced Salt Lake City Chapter 13 bankruptcy attorney, the full process will be explained clearly, and you can rest assured that we will do our utmost to guide you through it as smoothly as possible.