It is inadvisable to file for Chapter 13 bankruptcy without knowing all the facts. Chapter 13 bankruptcy is not good or bad in and of itself – your personal situation will determine how helpful it is to you.
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Ogden, UT (PRWEB) February 27, 2017
“The beginning of the year is a good time to get your finances in order, as well as to determine if it’s time to file for Chapter 13 bankruptcy,” said bankruptcy attorney Roy D. Cole, founder of the Cole Law Office. “It is inadvisable to file for Chapter 13 bankruptcy without knowing all the facts. Chapter 13 bankruptcy is not good or bad in and of itself – your personal situation will determine how helpful it is to you.”
To help people determine if Chapter 13 bankruptcy is right for them, Cole lists the following three tips:
No. 1: Know the difference between Chapter 13 and Chapter 7 bankruptcy. “There are very important distinctions between Chapter 13 bankruptcy and Chapter 7 bankruptcy,” stressed Cole. “Chapter 7 bankruptcy is called the ‘liquidation’ bankruptcy. In order for a court to discharge your debts, you must allow the court to sell some of your property. Chapter 7 bankruptcy, a four- to six-month process, means one visit to the local courthouse and about $300 in filing fees. While Chapter 7 bankruptcy is more popular and less costly than Chapter 13 bankruptcy, many prefer Chapter 13 because they do not have to liquidate any of their property.”
No. 2: Chapter 13 is not for everyone. With Chapter 13 bankruptcy, one must agree to settle some or all of their debts within three to five years. “Many low- or no-income Chapter 13 bankruptcy filers are turned down by the courts because they can’t prove they can keep up with the payment plan,” added Cole. “If your debt is too high, you may also be turned down for Chapter 13 bankruptcy, even if you have a regular income. To complete the Chapter 13 bankruptcy process, you are obligated to settle some of your outstanding accounts in full.”
No. 3: Chapter 13 length depends in part on one’s income. “If you made more than the median income for your state in the six months before you filed for Chapter 13, the court will probably recommend the five-year plan,” concluded Cole. “Conversely, if you made less than the median income for your state, the court will likely recommend the three-year plan. Of course, the amount of your debt matters as well. When you’re done with all your payments, your remaining debts will be discharged. Lastly, you must successfully complete a course on budgeting.”
About Cole Law Office LLC
Cole Law Office focuses on bankruptcy, personal injury, family law and criminal law. For more information, please call (801) 334-9537, or visit http://www.colelawofficeut.com. The law office is located at 289 24th Street, Suite 101, Ogden, UT 84401.
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