Needing debt relief is a common problem with people today, and Chapter 13 bankruptcy is one option you can turn to when you need assistance. If you do not know much about Chapter 13, it might be beneficial to learn some fundamental principles about this branch. Here is a breakdown of several features and details you might want to know about Chapter 13 bankruptcy.
You Must Qualify for It
You cannot use Chapter 13 bankruptcy unless you meet the eligibility requirements. While there are several you must meet, the main one is that you need income. You need a steady, reliable income stream to qualify. The reason for this is simple. With Chapter 13, you must repay the debts you owe. To repay them, you need income. You can find out if you qualify for this branch by speaking with a bankruptcy law attorney.
You Will Repay the Debt Over the Next Few Years
One fundamental principle of Chapter 13 is the required repayment plan. Unlike Chapter 7, you do not receive an instant discharge on debt. Instead, you repay the money you owe over time. Typically, a plan lasts for five years, but some plans last for only three. Your lawyer can tell you which timeframe you will have if you file, and it depends on your income.
If you complete your plan and still owe money on qualifying debts, the bankruptcy trustee might decide to forgive this debt. This only happens after you complete your plan, though, and it is only for qualifying debt. Qualifying debt generally means unsecured debts, such as credit cards.
You Keep Your Assets
A benefit that people like about Chapter 13 is keeping the things you own. You can keep your house, cars, money, and anything else you own if you file for this branch. You get to keep these things because you agree to repay the debt through your repayment plan.
You Must Report Changes
One last thing to know about Chapter 13 is that you must report changes to your lawyer or trustee when they occur. For example, if you get a pay raise at your job, you must report it. If you switch jobs, you must also report this. If you receive money from the lottery, you need to tell the trustee.
These few details can help you understand the basic idea of how Chapter 13 works. If you would like more information, you can talk to a bankruptcy attorney.