Three Questions about Chapter 13 Bankruptcy in St. LouisLeave a Comment
If you are worried about losing major assets such as your home or your car to an ever-increasing load of debt, bankruptcy may be an option. But there are several different types of personal bankruptcy, and it’s important to understand the basics of the process before you begin. When it comes to questions regarding Chapter 13 Bankruptcy in St. Louis, Teague & Associates, LLC can shed some light and provide help when you need it most.
Chapter 13 Bankruptcy is primarily utilized by working people who want to prevent the process of losing a home or additional assets and involves a repayment plan. In fact, it is often referred to as “reorganization.” That’s very different from Chapter 7 Bankruptcy, or “straight bankruptcy,” which involves the sale of assets and the discharge of debt, often without repayment.
While bankruptcy may be an option for you, consulting with a professional bankruptcy attorney and getting the facts up front is essential, so that you can make well-informed decisions. Here are answers to three common questions about Chapter 13 bankruptcy, offered by the lawyers at Teague & Associates, LLC.
How Does Chapter 13 Bankruptcy Work?
Chapter 13 bankruptcy does not eliminate your debts. Rather, a plan is created to repay all or part of your debt over 3 to 5 years. How much is repaid is determined by a number of factors, one of the most important of which is your income. A portion of some debt may be discharged in a Chapter 13 bankruptcy, though the details will be different for every case. Once the plan is set, it will be up to you to make the payments. But when the plan is completed, you should emerge with a more positive financial outlook.
Who Is Eligible for Chapter 13 Bankruptcy?
In order to make use of Chapter 13 bankruptcy, you must have a stable income that can sustain your living expenses, with enough left over to accommodate the repayment plan. The court is unlikely to grant a Chapter 13 bankruptcy to those whose income is too low to make payments, or who have only occasional work. In those cases, the court often favors Chapter 7 bankruptcy.
Can I Keep My Possessions?
Chapter 13 bankruptcy is designed to protect major assets. For example, it can be used to stop a foreclosure or to bring the payments on a loan current. But every case is different and much is left to the discretion of the court.