If you are worried about large amounts of debt piling up, you are far from alone. Individuals, families, and small businesses across the country are struggling to pay off their debts. Financial anxiety can feel like a never-ending burden as you start to wonder whether you will ever be able to regain control of your life. Unfortunately, many people view bankruptcy as a desperate or even shameful option, so they are hesitant to take steps to discharge their debts and obtain the financial “fresh start” they need. However, working with a dedicated and compassionate bankruptcy lawyer is the best way to understand your debt relief options. Together, you can assess your situation and determine the most strategic course of action. For many New York residents, Chapter 13 bankruptcy offers a bright path forward and enables you to regain control of your finances. Let’s explore some of the reasons why filing a Chapter 13 bankruptcy may work for you.
Chapter 13 Bankruptcy Basics
Most individuals seeking to discharge their debts can pursue a Chapter 7 or Chapter 13 bankruptcy filing. Chapter 7 bankruptcy is what most people think of: you wipe away your unsecured debt without paying your unsecured creditors back. Chapter 13, also known as reorganization bankruptcy, allows petitioners to keep unprotected assets (such as excess equity in their home or vehicle) as they gradually repay a percent of their unsecured debts over a period of three to five years. Those who file for Chapter 13 bankruptcy need to have a steady income, as they will need to make a monthly bankruptcy payment. Once you file a bankruptcy petition, the court will appoint a trustee to oversee your case, and you’ll need to attend a meeting of creditors where you will answer questions about your assets and liabilities (we’ll be there with you). If you adhere to the terms of your repayment plan over the three to five-year period, the court will issue a discharge, and you will be released from the remaining debts you owe (the remaining unsecured creditors will be wiped away).
Who Should File for Chapter 13 Bankruptcy in Auburn, New York?
Chapter 13 bankruptcy best serves those who have a steady source of income but have fallen behind on their payments. Homeowners who are facing foreclosure often find relief through this filing, as Chapter 13 immediately ceases all foreclosure activity. You will have three to five years to slowly and steadily pay back mortgage and/or real property tax arrears. At the end of this repayment period, the court will discharge any remaining unsecured debts, such as credit card payments and medical bills. Essentially, Chapter 13 bankruptcy gives you the time and support you need to catch up on past-due mortgage and/or tax payments as you regain control of your financial situation.
Benefits of a Chapter 13 Bankruptcy Filing
There are several reasons why you may want to consider filing a Chapter 13 bankruptcy in Central New York. Below are just a few of the advantages of pursuing this option over a Chapter 7 filing.
You Own a Home
When you file for Chapter 13 bankruptcy, the court will issue an automatic stay that prevents any foreclosure activity against you. You will be able to remain in your home and maintain control of your property during the repayment period, which allows you to breathe easier and catch up on the debt you owe. If you’ve fallen behind on your mortgage payments, the repayment period under Chapter 13 gives you the opportunity to catch up.
You Have a Steady Source of Income
Some people struggling with debt exceed the income threshold requirement set forth by Chapter 7, meaning they earn too much to qualify for Chapter 7 relief. Although it takes longer to move through the Chapter 13 process, you’ll have the time and opportunity to steadily regain control of your finances while keeping your property in your possession.
You’re Looking For a Fresh Start
Chapter 13 gives you the structure and support you need to catch up on missed payments and other financial obligations. Once the repayment period ends, the court will release you from your remaining dischargeable debt obligations (you will still be responsible for certain debts, like child support and student loans). Enlisting the guidance of a knowledgeable and understanding Central New York bankruptcy lawyer is the best way to take the necessary steps to feel hopeful about the future once more.