If you face serious personal debt and need help creating some breathing room to get control of your finances, a Chapter 13 bankruptcy may offer what you need. Chapter 13 operates unlike other forms of bankruptcy that require a people to liquidate most or all of their personal assets to pay off whatever debts they can. Instead, Chapter 13 allows those who qualify to create a plan to pay off their debt over time, using existing income.
Unfortunately, Chapter 13 is not blanketly available to anyone. Those who qualify must meet certain income requirements and other stipulations that indicate a candidate's likelihood of completing the process, or ability to complete the process.
If you face mounting debts and feel as though you cannot get on top them, you should consult with an experienced tax law attorney. The attorney can help you identify the options available and guide you through the process to ensure that your rights remain secure and that you do not miss any important benefits or exemptions along the way to financial freedom.
Why isn't Chapter 13 available to everyone?
Chapter 13 is more easily understood if you think about it as a framework for repaying debt instead of a way to discharge debt, although it does allow for some debt discharge. However, individuals who have only a small income legitimately cannot afford to repay their debt, so it is not a viable option.
Often, Chapter 13 is a good fit for those who simply need some structure to reclaim control of their financial life. Under Chapter 13, creditors must immediately cease all collections efforts, giving the debtor peace and quiet to sit down and breathe, then patiently pay off some or all of the debt.
Can I keep my property in Chapter 13?
In many cases, those who qualify for Chapter 13 do keep their property. In some cases, you may find that certain property does not fit within what Chapter 13 allows, and you may have to liquidate it to either qualify for Chapter 13 or continue the process.
The amount and variety of property that you may retain is difficult to estimate without professional guidance. If you are interested in seeing if you qualify for Chapter 13 or learning more about how it may affect your assets, don't hesitate to consult with an experienced tax attorney. You may find that you have more options than you think!