You file for Chapter 13 bankruptcy, go to court, get approved and then move forward with the repayment plan. Once that court case is over, has your debt actually been discharged?
There is sometimes a stereotype about bankruptcy, in which people believe they have to be in absolutely dire straights to file. They need to be unemployed, swamped in debt, facing foreclosure, and with no other way out.
You don't want to choose bankruptcy lightly. This is something you can only do so often, and it's a big step. To decide if it's the right move for you, ask these questions:
When you enter into Chapter 13 bankruptcy, a repayment plan is created. This may take 60 months to complete, and you have to stay current on the monthly payments. What you may be wondering, though, is if you can pay it all off early to get yourself out of bankruptcy.
Most people in Wisconsin need a vehicle in order to maintain a job. In a Chapter 13 bankruptcy, people will often have a vehicle that they are paying through their Chapter 13 plan. But because many Chapter 13s have a duration of five years, there are also many individuals who will have a car that needs to be replaced due to age or mechanical issues during the life of their plan.
At least in one bankruptcy court of the Eastern District of Wisconsin. In a Chapter 13, a debtor who worked for a car dealer receives a vehicle as part of her compensation. It added $625 per month to her income. However, she also had a second, personal vehicle. She did not include it in her current monthly income as listed on her Chapter 13 filings.
In most Chapter 13 bankruptcies, the debtor makes payments to the trustee for three to five years, and upon completion of the plan, they receive a discharge. In a somewhat unusual case, because a debtor experienced an increase in her income, the trustee was allowed to ask that she amend her plan after completion.
Although the economic recovery seems to have found its rhythm, many Americans, including those in Wisconsin, still struggle to make ends meet. When financial pressures mount, these individuals might look for options to stay afloat. Payday loans and credit cards are often used as a temporary measure, but far too often these sources of temporary relief become long-term economic pits. High interest rates and unfair lending practices can leave an individual struggling to maintain the debt. Oftentimes it is too difficult, and these debts balloon to proportions that make them impossible to pay back.
Previous posts here have discussed bankruptcy options and how particular bankruptcy routes may be beneficial to an individual or a business. Yet, sometimes the intricacies of bankruptcy can leave some Wisconsin residents forgetful of the big picture. For example, who, exactly, can file certain types of bankruptcy? This is a critical question, albeit preliminary, the answer of which could shape an individual's approach to finding debt relief.
Much of this blog is dedicated to discussing the advantages of bankruptcy. Those facing significant financial challenges may be able to find real debt relief by seeking Chapter 7 or Chapter 13 bankruptcy, but the process is not always guaranteed. Even if a petition is granted, following through on it can prove tough, which can leave some Wisconsin residents even more concerned about their financial future.