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A wage earner's plan: Chapter 13 bankruptcy

Have you ever considered bankruptcy and then wondered if you qualified? Many Wisconsin working individuals who struggle with debt believe they own or make too much to qualify for bankruptcy. If that is you, you will want to read on.

Chapter 13, "also called a wage earner's plan," is just for such individuals. Having a lot of income, unfortunately, does not preclude people from being "debt-poor." People at all different income levels find themselves in serious financial trouble.

If that rings true for you, getting out of debt might not be as difficult as you think. Chapter 13 allows you to adjust and reorganize your debts so they are manageable and can be paid over a three- or five-year period. You can also keep your property, such as your house and cars.

There are many advantages to filing Chapter 13. First, it will stop any collection actions against you immediately upon filing. Creditors are notified that they can no longer contact you directly, but must contact your attorney. A Chapter 13 bankruptcy filing can even save your home, stopping any foreclosure proceedings.

Chapter 13 can also protect co-signers who may have signed on debts with you. Finally, your debts will be reorganized and consolidated into one monthly payment that is paid to a trustee. All you have to do is make that monthly payment for the duration of the plan, and you can enjoy a fresh financial start.

To be eligible for Chapter 13, your unsecured debts must be less than $394,725, and your secured debts must be less than $1,184,200. You must not have previously filed for bankruptcy within the past 180 days, and you must receive some type of credit counseling.

A bankruptcy attorney can provide more information on Chapter 13 bankruptcy. He or she can explain the details and walk you through the process to get you started.

Source: United States Courts, "Chapter 13 - Bankruptcy Basics," accessed Feb. 02, 2018

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