Unlike Chapter 7 bankruptcy, a Chapter 13 bankruptcy filing requires you to repay a certain portion of your debts over a fixed period of time. While at first glance it might seem clear that Chapter 7 is the more attractive option, Chapter 13 is actually preferable for individuals who own property and have stable jobs. Unlike Chapter 7, Chapter 13 does not require you to liquidate your assets, meaning you can hold on to your home. Generally, the repayment period lasts five years, and after you’ve completed five years of regular payments, it is possible to discharge the remaining debt. However, it is imperative to ensure that you make regular payments during the five-year period. Here are some tips for managing your Chapter 13 bankruptcy repayment plan.
- Consult with an Attorney
Chapter 13 bankruptcy settlements are often very complicated. In situations where there are multiple creditors, the payment plan can be complicated. In order to make sure that you are paying the right amount, it’s wise to consult with an attorney who is an expert in bankruptcy law. A trained attorney will help you navigate the court’s ruling and ensure that you are fully aware of your responsibilities under the repayment plan. Failure to follow the court’s order precisely can result in even more financial problems.
- Practice Financial Responsibility
Of course, the most important thing you can do during a Chapter 13 bankruptcy repayment plan is to practice financial prudence. Successfully completing a five-year repayment plan can help you regain your financial health and discharge your debts. For this reason, it is important to make sure that you make the right payments on time. Doing so often requires adjustments in your budget.
If you are considering filing for Chapter 13 bankruptcy or are on a repayment plan currently, make sure to consult with a bankruptcy attorney. Doing so can help you successfully complete your repayment plan.
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