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Understanding Chapter 13 bankruptcy

On Behalf of developers | September 4, 2017 | Chapter 13 Bankruptcy

Even in the midst of a relatively healthy national economy, many consumers in Mississippi continue to find themselves struggling to get out from under high piles of debt. If you are one of the people plagued by debt and expenses that you cannot get ahead of, you may be wanting to know if a bankruptcy could help you. Before you jump in and make a decision, it is important to understand Chapter 13, one special type of consumer bankruptcy.

As explained by the United States Court, with a Chapter 13 bankruptcy your debt is not simply eliminated as with a Chapter 7 bankruptcy. At the same time, your assets are not subject to being lost either. Rather, a Chapter 13 plan is a form of consolidated repayment that allows you to make one payment per month versus many. You make payments to a trustee who then disperses money to your creditors. This happens over a period of 36 to 60 months. Generally the amount of money you repay is less than what was originally owed as creditors agree to receive less in exchange for receiving something.

Because you are making payments, your belongings are not seized and sold. Homes and mortgages are not part of Chapter 13 bankruptcies but these plans can give you the ability to reduce your overall debt and get and stay current on your mortgage so you can avoid losing your home as well. 

If you would like to learn more about how exactly a Chapter 13 bankruptcy works and if it could be right for you, please feel free to visit the structured repayment debt relief page of our Mississippi consumer bankruptcy website.

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