Last week we had a Friday the 13th. While the number thirteen may seem unlucky to many, when it comes to Chapter 13 bankruptcy, it may actually help you in the long run. Bankruptcy itself is also a scary word with negative connotations, but in reality, bankruptcy can sometimes be compared to a life safer, utilized to help someone struggling financially to get out of the hole and eventually work towards a life out of debt.
Two common forms of personal and small business bankruptcy is Chapter 7 and Chapter 13, though there are a few distinctions. Chapter 7 is a liquidation bankruptcy, which Chapter 13 is a reorganization bankruptcy. Any can file for Chapter 7, but not everyone qualifies for Chapter 13, which requires certain financial situations to be present in order to qualify. For example, if your income is too low or irregular, you may not qualify because you are unable to make the necessary payments required. In addition, if your secured debts exceed $1,010,650 or your unsecure debt is more than $336,900, you do not qualify.
To file for Chapter 13 bankruptcy, you must also have credit counselling from an agency approved by the United States Trustee's office. You will also need to pay a fee of $274. Even when all that is done, the repayment plan is also vitally important.
Filing for bankruptcy is not an easy endeavor, and as we discussed earlier, it is not for everyone. If you find your self in a situation where you care considering bankruptcy, it may be wise to speak with a law professional familiar with bankruptcy to discuss your options and determine which type, if any, works best for you. Your finances and future are too important to overlook.
Source: FindLaw, "Chapter 13 Reorganization Bankruptcy," Accessed on Jan. 17, 2017