Chapter 13 bankruptcy is basically a repayment process backed by the court.
Los Angeles-Long Beach, CA (PRWEB) July 31, 2014
Debt Consolidation USA recently shared in an article published last July 30, 2014 the steps a consumer has to take when filing for Chapter 13 bankruptcy. The article titled “Step By Step Chapter 13 Bankruptcy Process” aims to educate debtors who are way in over their heads with debt payment and are looking to seek debt relief by filing for bankruptcy.
The article starts off by explaining how bankruptcy can adversely affect a consumer’s credit score by as much as 200 points. And the bankruptcy will reflect on the credit report for years to come. Future creditors frown on borrowers asking for a loan who underwent bankruptcy. This is because of the possibility that the borrower might not be able to pay back the loan down the line because of a previous bankruptcy record.
Even though Chapter 13 bankruptcy filing fell from 355,081 to 329,256 from 2013 to 2014, it shows that there a lot of debtors seeking refuge under bankruptcy to discharge them of suffocating debts. As most would prefer Chapter 7 bankruptcy because it discharges most loans after liquidating assets, Chapter 13 bankruptcy is an option for debtors whose income is above the average median and are deemed able to pay a portion of their debts.
As Chapter 13 bankruptcy is basically a repayment process backed by the court, the article shares the steps that a debtor needs to know when undergoing bankruptcy filing. The first thing a debtor need to do is to set a meeting with the lawyer. Though it is possible to apply, file and undergo bankruptcy filing without an attorney, it is always best to have one to be guided more accordingly.
Taking a means test is also part of the process as this will determine if a Chapter 7 or a Chapter 13 is best suited for the current financial status of the debtor. There is also a credit counseling course that is required by the bankruptcy court. This can let the debtor know of other possible options to get out of debt outside bankruptcy.
The article explains that the next step is preparing the documents or known in the bankruptcy industry as “schedules”. The next steps would be to have the lawyer file the petition together with the schedules and payment plan. To read the rest of the article, click on this link: http://www.debtconsolidationusa.com/bankruptcy-2/step-step-chapter-13-bankruptcy-process.html.