As a debtor, you are probably aware of the many hassles that may come your way of you happen to default on your secured debt payments, with or without being at fault. Be it for a car payment or a home mortgage, your failure to meet your debts in time can make you look for helpful repayment plans for debtors, such as the bankruptcy Chapter 13. If you are still wondering about what can come your way in case you fail to honor your dues in time, then do know that you will have to face low-level adverse proceedings from your bankers to begin with.
The ordeal will start after a month or more of your failure to meet the debts, possibly with frequent phone calls and payment reminders. Then, with the passage of another couple of months, you may find yourself dealing with high-level adverse proceedings commenced by your moneylenders. These proceedings may be in the form of repossessions or foreclosures. However, if you happen to have the means to take care of your payments, but just need a little time to get things underway, then bankruptcy Chapter 13 serves as a reliable federally-backed repayment option that gives you up to five years of time for bringing your accounts current.
Did you know that in the course of this repayment period, your moneylenders will not be allowed to initiate any adverse action to impact you without getting special permission or orders from the bankruptcy court? All in all, the bankruptcy Chapter 13 would offer a well-organized repayment schedule that is likely to fit into your budget, along with giving you added peace of mind. Once the repayment period ends, or in some cases a little earlier, as a debtor, you can look forward to enjoying a fresh financial start – courtesy the Bankruptcy Code guaranteed to all debtors.
Overall, this kind of bankruptcy happens to be ideal for those debtors who are lagging behind on their secured debts yet desire to retain the collaterals set aside by them. But then, to take due benefit of this program, they must meet up with a few qualifications. For instance, for unsecured debt amounts, it is important for debtors to have no more than $307,675 in medical bills, credit cards, and other unsecured debts. For larger debt loads, Chapter 7 bankruptcy serves to be a better option than Chapter 13. In case a debtor has over $922,975 in the form of secured debts, he may not qualify for bankruptcy Chapter 13. The reason being that it’s tough to pay up such large amounts in a period of three to five years. Here again, Chapter 7 serves to be a better option.
The various features of bankruptcy laws are best explained by an experienced attorney – get in touch with one today.