In many ways, Chapter 13 bankruptcy is the same as it ever was: you are under the “wage earners plan” which entails a three to five year repayment plan of non-dischargeable debts. However, previous Chapter 13 bankruptcy cases were decided by a judge who took the budget under consideration and included allowances such as cost of living, special needs, disabilities, etc. Now these judges allow very little wiggle room in regards to allowances and are much quicker to reject the Chapter 13 bankruptcy applicant because of budget and repayment concerns.
What Happens If Your Chapter 13 Bankruptcy Goes Through
If you, your attorney, the court, and your creditors are all in agreement concerning your repayment schedule and budget, and if all the necessary paperwork and coursework have been completed then your Chapter 13 bankruptcy will be filed. At this point a court trustee is appointed to your case. This person will act as the middle man between you and the creditors during repayment: they will not only take the agreed upon portion of your income from you and submit it to your creditors but they will also make sure you are making your payments on time.
At around the fourth year of your Chapter 13 bankruptcy, you will learn from the court exactly which of your loans will not be paid in full by the completion of your bankruptcy and which of those loans will be dischargeable by law. This means you will not legally bound to repay the balance on those loans. There are certain specific loans that can be discharged and the ones that can’t must be paid off even after your bankruptcy has concluded.
Find Out if Chapter 13 Bankruptcy is Right for You
Chapter 13 bankruptcy may or may not be an option for you but you won’t know unless you find out today. Talk to a licensed bankruptcy attorney today if you’re buried under debt and want to know whether or not bankruptcy is in play or if you are lucky enough to be able to solve your financial woes via debt consolidation or debt management. This knowledge will be useful in helping you get on your way to a new and exciting life free of debt.
