Finding yourself living paycheck to paycheck adds to your stress. When your debts become overwhelming, and you find it impossible to dig out without help.
When the bill collectors will not stop calling, and your mortgage company is threatening to take action, you may want to consider bankruptcy as an option. The stigma that once surrounded the process is all but gone. One option you may qualify for is filing under Chapter 13 bankruptcy protection. Find out what this may do for your present and your future.
Chapter 13 restructures your debt
If you have a steady income, Chapter 13 makes sense. It allows for a restructuring of the debt to make it easier to repay some or all of it. Secured debt, or those items acting as collateral, such as a home or vehicle, take priority over credit cards or unsecured debt. A trustee appointed by the court will negotiate the payment terms with your creditors. Depending on your median income and debt, your plan may last anywhere from three to five years.
How Chapter 13 helps you now
Filing bankruptcy puts a stay on collection efforts. Creditors cannot initiate contact in any way. Everything must go through the court. It also stops foreclosure unless the proceedings have concluded before your filing bankruptcy. Of course, if you do not continue to make payments on the mortgage under the repayment plan, you may still face foreclosure down the road. For the immediate time, you will no longer have to communicate with creditors.
Regardless of how you got into debt, finding a way to rise above it may involve bankruptcy. The process may leave you with a clean slate once you fulfill the repayment plan.