Bankruptcy isn't something you plan for, but it may be something you need to do during your lifetime to help get you out of debt and back to a place where you feel like you can breathe again. Getting into debt is easy to do, but getting out of debt is another story. This is where filing bankruptcy comes in, but you still have to do work on your part. If you are considering filing bankruptcy, read on for everything you need to know.
What Is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy is a way to pay back your debts but with a payment plan that you can actually afford. A payment repayment plan is set up by the bankruptcy trustee. Some debts may be paid in full, while others may only be paid back a portion. The payment plan is based on your income and what assets you have at your disposal. The debt repayment plan can take anywhere from 3 to 5 years, although this depends on your debts and your income to pay back the debts.
Who Can File Chapter 13 Bankruptcy?
Anyone can file Chapter 13 bankruptcy, but it's usually for those who own property and have income coming in regularly. You also cannot have filed for bankruptcy within the last 180 days and will also need to complete a credit counseling course.
Can Creditors Still Contact You During Your Chapter 13 Bankruptcy?
Once you have filed your bankruptcy, the creditors should cease contacting you. If any creditors are continuing to contact you, you can advise them to contact your bankruptcy attorney. Your bankruptcy attorney can call the creditors and send a copy of the bankruptcy filing to the creditor.
What Can Be Included In A Chapter 13 Bankruptcy?
A Chapter 13 bankruptcy can include outstanding loans, credit cards, medical bills, and other debts. Student loans and IRS debts cannot be included in a Chapter 13 bankruptcy. These do need to be paid back in full. Any other government-type loan needs to be paid back and cannot be included in your bankruptcy.
What Does Bankruptcy Do To Your Credit?
When filing for bankruptcy, it will be listed on your credit report. This doesn't mean you won't ever be eligible for any type of loan later down the road. This tells potential creditors that you have filed and won't be able to file again for some time. The interest rate you qualify for may not be ideal, but you can always refinance the loan later after making good faith payments for a little while.
If you are struggling to pay back your debts, make an appointment with a bankruptcy attorney for a consultation to get your head above water again.