Chapter 13 bankruptcy is one of the most popular debt relief options for individuals. It lets consumers reorganize their debt into a repayment plan that makes it easier to pay back what they owe to creditors. If your financial obligations have become too much to bear, this may be a viable solution. To learn more about this option, the legal team at The Law Office of J. Baron Groshon in Charlotte, NC, shares a brief guide.
What Is Chapter 13 Bankruptcy?
To file for a Chapter 13 bankruptcy, you need to earn a steady income and your debts cannot exceed a certain amount. The current debt limitations are $394,725 for unsecured debt and $1,184,200 for secured debt. Unsecured debts are anything not backed by collateral, such as credit cards, medical bills, and personal loans. Secured debts include car loans, mortgages, student loans, child support, and alimony. In addition, you must complete a state-approved credit counseling program at least 180 days before filing.
How It Works
If you qualify for Chapter 13 bankruptcy, you will develop a repayment plan to propose to the creditors and the court. A court-appointed trustee will review the proposal and contact the creditors before a final repayment plan is approved. The amount you pay each month will depend on how much you owe, the type of debt you owe, your income, and necessary expenses. Once the plan is confirmed, you will have three to five years to continue making payments. After the plan has been completed, your remaining unsecured debt may be discharged. However, you still must pay the secured debt in full.
To determine whether Chapter 13 bankruptcy is the right choice for your situation, it’s best to consult with an experienced attorney. Over the last three decades, The Law Office of J. Baron Groshon has helped residents throughout Charlotte, Concord, Gastonia, and Lake Norman reach financial freedom. He will assess your needs to make sure this is the most suitable path for you. Call (704) 342-2876 or visit him online to learn more about this law firm.