Chapter 13 bankruptcy is a legal action that involves submitting a plan of repayment with the assistance of a lawyer. If the plan receives court approval and regular payments are made throughout the three to five years, any debts that are leftover are often discharged. When bankruptcy is used properly, it can be a highly beneficial process for people in Mississippi who struggle with debt.
The task of calculating a repayment plan that properly suits your unique circumstances can be daunting when it seems that your entire future rides on the decision. Making seemingly simple mistakes may lead to unnecessary complications later on, which is the last thing you need during the bankruptcy process. However, it is possible to make an informed decision with the right information and by taking it one step at a time.
Determining your disposable income
Those who are filing for Chapter 13 first need to find out what types of payment plans they’re eligible for. This step is key in creating a manageable plan that you’ll be able to stick to.
To build your repayment plan’s structure, you need to determine how much you’re able to pay back every month and how long the payment plan should last. This is determined based on two forms, 122C-1 and 122C-2, that list your average monthly income and your disposable income. Have this information readily available:
• Household income
• Expenses for food, utilities, taxes, health care, etc.
Filing your plan with the court
Once you’re into the plan creation phase, you use the information gathered above to draft up the plan period and monthly payment amount. The deadline for filing the final version of your repayment plan with the bankruptcy court is 14 days after its creation.
Filing for Chapter 13 bankruptcy can be a stressful process full of uncertain questions. You may make this difficult legal decision easier to manage by setting up the right repayment plan. This helps to ensure that your financial future is on the right track.