What Comes Next After You’ve Filed Chapter 13 Bankruptcy in Court
If you’re eligible for it then Chapter 13 bankruptcy could be an attractive alternative to the more popular Chapter 7 bankruptcy. The problem is that in order to be eligible for Chapter 13 bankruptcy you have to have so much income coming in. “The wage earner’s bankruptcy,” as it is referred to, allows the individual to continue working and making money while your bankruptcy unfolds.
In the span of roughly three to five years a court-appointed trustee takes a portion of your income and regularly divides it amongst your creditors. You do not have to worry about liquidating your assets which is what happens under Chapter 7 bankruptcy. If you are wondering whether or not you’re eligible for Chapter 13 bankruptcy then you should consult a licensed bankruptcy attorney. They will go over your case and should be able to tell you whether or not you’re eligible.
Living a “No-Frills Lifestyle”
Think about your paycheck before bankruptcy with all the taxes, social security, and union dues that came with it. Just think of your Chapter 13 bankruptcy as another hole in your paycheck as the court trustee divides a portion of it amongst your hungry creditors. As a result you might have to take the following actions to compensate these deductions:
• Lowering your living costs by moving to a cheaper residence or moving in with friends or family
• If eligible, you should consider food stamps to offset how much you pay for groceries
• Utilize cheap forms of transportation such as bicycling or walking when appropriate
• Even though it requires court approval you should still try to avoid car loans and credit cards because these will only add to your list of unnecessary expenditures
Getting Your Chapter 13 Bankruptcy Over With
Quite possible the biggest advantage to filing a Chapter 13 bankruptcy over a Chapter 7 bankruptcy is the fact that your ordeal is over with a whole lot sooner. Yes, a Chapter 7 bankruptcy can take as many as 10 years whereas a Chapter 13 bankruptcy cannot legally last longer than five years.
With the light at the end of the tunnel being that much closer, you should be able to adopt an after-Chapter 13 bankruptcy lifestyle that much more quickly. It might not be fun to live such a free lifestyle but it will no doubt pay off in the long run as you will be able to get your bankruptcy over with and move on with your life.
