Chapter 13 Bankruptcy Basics

Overwhelming debts, frequent creditor calls, and financial challenges can leave you feeling as though you have nowhere to turn. The good news is that you are not alone. If you are looking for a solution, you might be considering a Chapter 13 bankruptcy. With this bankruptcy approach, you will not have your debts completely discharged, but instead, you will restructure your debts into manageable payments. If you're wondering whether or not this is the right option for you, there are a few things that you should know.  

Have You Filed A Chapter 13 Bankruptcy In The Past?

If this is not your first time filing for Chapter 13, you need to consider how long it has been since the last time. In most cases, you can file another Chapter 13 case if it's been more than a couple of years since your last one was discharged. Talk with a bankruptcy attorney about the specifics of your case to see if this applies to you.

Have You Had A Bankruptcy Case Dismissed?

When you file for bankruptcy of any kind, there are specific standards that must be met. When you appear in court, the burden is on you to prove that you meet those standards and are filing the case in good faith. If you ever have a case dismissed, you can attempt to file again after several months. Your attorney can help you assess the reason why the case was dismissed and rectify it before you file again to improve your chances of success.

Does Your Income Matter When Filing For Bankruptcy?

In some bankruptcy cases, your income does apply. For example, you must pass a means test, including specific income limitations, to file for Chapter 7 bankruptcy. If you make more money than the Chapter 7 restrictions permit, you may be able to file for Chapter 13 instead. You'll need to talk with your lawyer about the guidelines and income restrictions as well as any asset limitations that might apply to either type of case. The more you understand about the income restrictions and asset limits, the easier it is for you to decide if Chapter 13 is the right choice.

Exploring Chapter 13 bankruptcy might be the best way for you to determine if it is the right solution for your financial situation. The more you understand, the easier it is for you to weigh out your options. Discuss these facts and any questions you have with a bankruptcy attorney before you make a decision.

Contact a local bankruptcy lawyer to learn more.