Chapter 13 bankruptcy makes a feasible payment plan for those who want it to last 3-5 years. The length of the plan might seem discouraging for a few who initially preferred chapter 7 bankruptcy to pay off their debts. Chapter 13 bankruptcy, however, has several benefits, including certain that are not available in Chapter 7, and it might be an ideal solution for your long-term financial health.
The top benefits of Chapter 13 bankruptcy include:
· It allows you to pay what you can easily afford
· It eliminates the debts you can’t pay in full
· It saves your assets, including your house from foreclosure, and
· Also, removes the second or more mortgage
Chapter 13 bankruptcy allows a ‘pay what you can afford’ solution for your debts
Chapter 13 bankruptcy enables you to make a single monthly payment to the trustee that will cover your debts. Your payments are basically determined by your budget that you are supposed to put together with a reliable bankruptcy attorney for approval by the bankruptcy court. Your finances allow you to repay what you can afford.
Your budget is an arrangement of your monthly expenses, standards of the Chapter 13 trustee, and IRS standards. Your monthly income deducted from the above expenses leads to the amount you pay off to your bankruptcy trustee every month. The amount you have to pay to your bankruptcy trustee is as well called discretionary income.
Even though you now don’t have discretionary income above what you have to pay in expenses because of the job loss, costly monthly car payments, or any other dynamics, your chapter 13 bankruptcy attorney could often help you build a plan that reorders costly loan payments or concedes payments until you are assured of adequate income.
Chapter 13 bankruptcy eliminates a debt
Since you will pay what you can afford, you might not be able to repay 100% of the debt over 3-5 years. In most Chapter 13 bankruptcy cases bankruptcy filers don’t pay off 100%. People, in fact, often only pay off a little fraction of what is primarily owed. The debt amount you don’t pay off over the course of the Chapter 13 budget plan is later handled the similar way it would be in Chapter 7 bankruptcy – all of your dischargeable debts will be wiped out, thus you can have a fresh start.
What happens when you pay off 100% of your debts over 3-5 years?
Chapter 13 bankruptcy offers you the most effective debt repayment plan. Your chapter 13 bankruptcy keeps any additional interests from ensuing on dischargeable financial liabilities. You only have to repay the balance owed on the day you filed your bankruptcy. For instance, if you pay 18% compound interest on $30,000 on your credit card debt, chapter 13 can save you around $19,000 in interest over 5 years. The conclusion is that you could be totally out of debt in 3-5 years that might be impossible without bankruptcy.
Recovery Law Group, on the other hand, can provide you with a feasible chapter 13 bankruptcy, thanks to their evolving team of experienced chapter 13 bankruptcy attorneys.
