On behalf of Trenton Grand of Grand Law Firm posted in chapter 13 bankruptcy on Monday, December 31, 2018.
Louisiana residents who are facing serious debt problems can consider filing for Chapter 7 or Chapter 13 bankruptcy. Those who file for Chapter 13 protection will repay creditors for up to five years. In exchange, they reserve the right to maintain property such as a home. The amount of the payments made to creditors will be determined by how much disposable income a filer has.
During a repayment period, it is generally necessary to obtain approval to make changes to the agreed upon payment plan. Priority and secured debts generally get precedence over unsecured debts. Examples of priority debts include taxes owed, child support and alimony. Secured debts include home or auto loans while unsecured debts include credit card or medical bills. Certain debts such as child support or taxes owed cannot be discharged at the end of the repayment period.
Furthermore, debts may not be discharged unless a debtor takes required educational courses prior to the end of the repayment period. In the event that a debtor experiences a change in their financial circumstances, they could negotiate new debt repayment terms. In addition to those who want to keep their property, a Chapter 13 filing may be appropriate for those who cannot pass a means test.
Filing for Chapter 13 bankruptcy may be beneficial for many different reasons. For example, the filer will get an automatic stay of creditor collection activities. This means that a home, car or other asset will not be foreclosed upon or repossessed. Other possible benefits include the ability to renegotiate the terms of secured loans or obtain more time to repay existing debts in an organized fashion. An attorney may further explain the potential benefits of filing for bankruptcy.
Tags: Chapter 13 Bankruptcy