What is Chapter 13 Bankruptcy?

If you earn a decent living but still find yourself living from paycheck to paycheck it may be time to consider filing for bankruptcy protection. Like many people, you likely have a number of concerns that may have prevented you from pursuing bankruptcy up to this point; however, once you know more about the process and the benefits bankruptcy offers you will find your concerns are alleviated.

At The Cassidy Law Firm we understand how financial difficulties can add stress and strain to your life which is why we are dedicated to helping individuals and families find a long-term solution through bankruptcy. To learn more about your options, contact the office today at 732-747-3999 or 888-386-4098.

How Does a Chapter 13 Bankruptcy Work?

Most individuals (or couples if married filing jointly) file for bankruptcy protection under chapter 7 or chapter 13 of the U.S. Bankruptcy Code. As a general rule, chapter 7 is used by debtors who earn a moderate to low income and do not have significant non-exempt assets they need to protect. Chapter 13 is favored by debtors who have above average income and/or who have valuable non-exempt assets they do not want to lose as a result of the bankruptcy.

When you file a petition for bankruptcy the court will issue an automatic stay. This order prohibits creditors from any further attempts to collect on a debt, including garnishment, “freezing” your bank account, and foreclosure proceedings.

You and your attorney will develop a repayment plan that contemplates the repayment of most of your debts over an extended period of time, typically three to five years. Once the court approves your repayment plan you will begin paying the bankruptcy trustee a fixed amount each month. The amount you pay will be based on your income and expenses. The trustee will then distribute the funds to creditors based on priority and amount of the debt. Upon successful completion of the repayment plan most remaining debts will be discharged, or forgiven.

Assets in Chapter 13 Bankruptcy

The most common reason why debtors hesitate to consider bankruptcy as a viable option to financial difficulties is the fear of losing important assets such as a home or vehicle. A Chapter 13 bankruptcy allows most debtors to keep all of their assets, including a home and vehicle even if the loan is in default at the time the bankruptcy is filed.

The bankruptcy attorneys at The Cassidy Law Firm realize that you may have a number of questions and concerns that must be addressed before making the decision to pursue bankruptcy.

We are happy to answer your questions and discuss your concerns with you so that you can make an informed decision about your future. Contact us today at 732-747-3999 or 888-386-4098 to make an appointment and get started on the path to financial stability.