How can Chapter 13 bankruptcy help Indiana residents?

On Behalf of | Jan 24, 2019 | personal bankruptcy |

Financial challenges are nothing new to people in Indiana and across the nation. Given the current state of the economy and the difficult nature of government gridlock, people are increasingly finding themselves in need of assistance to get back on stronger financial ground. Filing for bankruptcy is frequently considered a last resort. People might think bankruptcy is an effort to avoid responsibility and not live up to their debts. However, once they understand that it is a legal strategy to obtain a better financial circumstance moving forward, they realize they can benefit from it. For those who want to stop foreclosure and stop repossession, Chapter 13 is the wisest step.

There are certain benefits with Chapter 13, but it is imperative to understand the requirements. With Chapter 13, the debts will be repaid over a period of three or five years. This is a plan for people who are wage-earners. The amount they earn per month will determine if the plan will be for three or five years. Chapter 13 is different from Chapter 7 in that Chapter 7 is liquidation where the person’s property is sold to pay back the debt. If a person has no valuable property, it is preferable to file for Chapter 7. Chapter 13, however, lets people keep a home, a car and more.

Paying the monthly Chapter 13 payment on time and in full will avoid foreclosure. It is also better for the debtor when they seek to rebuild their credit, as it will only appear on the credit report for seven years as opposed to 10 with Chapter 7. It will let the person make manageable payments and they will no longer be wondering how they are going to survive month-to-month. Essentially, Chapter 13 is like a loan in which the debts are consolidated and the trustee doles out payments to the creditors. Debtors will also be free of debt collector calls and letters.

When there are debt issues in Indiana, having legal help can provide avenues to get into a better situation. Chapter 13 is one alternative to consider. Before doing anything, it is important to understand the value of a qualified debt relief lawyer. Calling for a consultation is the first thing to do when seeking a strategy to get out of debt by filing for bankruptcy.

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