In these uncertain times, many people in Florida may find themselves facing the very difficult situation of deciding which of their many bills to pay and which to let go another month, all while facing dreaded phone calls from creditors. When debt becomes overwhelming, Chapter 13 bankruptcy may be worth considering.
What is Chapter 13 bankruptcy?
Chapter 13 bankruptcy is also referred to as a “wage earner’s plan.” In a Chapter 13 bankruptcy, debtors enter into a three to five-year repayment plan where they make regular payments on their debts without any further collection actions taking place. After the repayment plan concludes, many of the debtor’s liabilities will be discharged.
What are some advantages to Chapter 13 bankruptcy?
Chapter 13 bankruptcy has many advantages. It can prevent foreclosure if all mortgage payments due during the repayment plan are made on time and in full. It also provides a means for rescheduling secured debts, giving the debtor a longer amount of time to pay them back at a lower rate. Ultimately, Chapter 13 bankruptcy is similar to a consolidation loan, and debtors make payments to a bankruptcy trustee without having to deal with creditors on their own.
Chapter 13 bankruptcy may be the right choice for some
When we face overwhelming debt, the situation may seem hopeless. However, filing for Chapter 13 bankruptcy may offer a debtor the fresh financial start they need. This post does not contain legal advice. Bankruptcy attorneys in Florida may be a useful resource to those who want to know more about Chapter 13 bankruptcy.