If you find yourself overwhelmed by debt and unable to pay all your monthly bills, one possible solution is filing for bankruptcy. This legal action may allow you to recover from difficult financial circumstances, stop pursuit from creditors and start over with a more manageable way to pay off debt. There are several types of bankruptcy with different requirements and terms. If you are facing foreclosure and want the chance to stay in your home, you may want to see in you qualify for chapter 13 bankruptcy.
The bankruptcy guidelines listed on the U.S. Courts website describe chapter 13 as a “wage earner’s plan.” As such, one of the main requirements for this type of filing is that you have a regular income. If you do, you may qualify for this type of plan, which allows you to work with your creditors to develop a repayment plan. In most cases, a repayment plan makes it possible for you to pay off your debts in 3 years. You may get up to 5 years to pay off your debt if you meet certain thresholds for low income.
One of the most notable advantages of filing for chapter 13 bankruptcy is that it gives you the chance to remain in your home and avoid foreclosure. When you file, you may be able to put a halt to the foreclosure process and even create a repayment plan to cover delinquent mortgage payments. The terms of chapter 13 generally require you to continue making your normal mortgage payments on time during the repayment time frame. You may lessen your financial burden by using the chapter 13 process to extend other secured debts over the full term of the repayment plan, lowering the overall cost of monthly payments.