A chapter 13 bankruptcy is commonly known as debt consolidation. When you file for a chapter 13, you’ll be permitted to retain all your assets, considering you can keep on regularly paying off your loans to secure your assets. While this may sound a bit complicated, it’s really not.
Chapter 13 Bankruptcy in Layman’s Terms
The chapter 13 bankruptcy option is developed so you can keep your assets and consolidate some of your debts into a more affordable payment plan depending on your paying ability. This allows you to resolve any late mortgage payments you may have acquired over time, while still keeping your home.
In most instances, you may be allowed to lessen your secure obligations such as furniture accounts or car loans. This means you’d only be obligated to pay off the property value and not the entire balance of the loan. You may also be allowed to pay off delinquent child support and taxes through more affordable monthly payments, and keep off additional taxes and garnishments.
Essentially, you’ll only pay off all that you can afford. This is done via a monthly payment plan consolidating all your past debts, not ongoing payments, into just a single payment.
Other Important Things to Know
Godfrey Law says that under Utah bankruptcy laws you’ll be able to keep around $1,000 to $2,000 each annum in tax refunds, although you’ll have to pay off the chapter 13 bankruptcy case for amounts higher than your tax refunds during the first three years of the payment plan. In the event that you skipped your monthly payment, you should consult a lawyer and request to the court that your plan be lengthened, or your missed payments forgiven.
In addition, a chapter 13 bankruptcy attorney in Ogden states that you should complete credit counseling conducted by a Utah U.S. Trustee approved by the state within six months prior to filing for bankruptcy. You must likewise complete debtor education classes before being granted a bankruptcy discharge.