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Understand the ins and outs of Chapter 13 bankruptcy

When you have the assets or income that exceed the means test that is used to determine eligibility for Chapter 7 bankruptcy, you might end up filing for Chapter 13. This is often referred to as the working man's bankruptcy because it includes a repayment plan that is based on your income and expenses.

We know that filing for bankruptcy isn't something that you are taking lightly. You have probably tried crunching numbers and even lost some sleep over these debts. When you can't figure out what to do, you have to do something different. Bankruptcy might be that course of action.

You should remember that Chapter 13 bankruptcy isn't fast or easy. Instead, you will have to live on a budget and make regular payments to the trustee based on the approved repayment plan. As long as you make those payments on time and comply with other requirements of the plan, any remaining balances will be dismissed when the bankruptcy case is closed at the end of the repayment period.

One requirement of all bankruptcies is that you have to go through education programs. One of these has to be done prior to filing and the other one has to be after the case has begun but before the dismissal. While these might seem like a waste of time, you might learn valuable advice about budgeting, saving money or rebuilding your credit so make sure you pay attention to them.

If you aren't sure that Chapter 13 is right for you, we can help you go over this form of bankruptcy as it pertains to you. This might help you feel more confident as you move forward with your case.

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