3 Things To Know When Filing For A Chapter 13 Bankruptcy

Filing for bankruptcy is challenging, but it's the best way to get their finances back on track for many people. A Chapter 13 bankruptcy involves reorganizing your debt to make your payments more manageable. In contrast, a Chapter 7 bankruptcy clears your debts, but you will have to surrender much of your property, whereas, in most Chapter 13 filings, you can keep your home. Here's what to know when filing for Chapter 13 bankruptcy. 

How It Works

Knowing the ins and outs of a Chapter 13 bankruptcy will help you determine if this is the right bankruptcy option for your needs. A successful Chapter 13 bankruptcy filing sets up a payment plan that allows you to resolve your debts while still maintaining your quality of life. Your disposable income will go to your debts, but you'll be able to continue living in your home and keep your assets. You'll have three to five years to get rid of your debts with your payment plan. 

Whether It's An Option

While a Chapter 13 bankruptcy may be tempting, you need to determine whether it's an option. To be able to qualify for a Chapter 13 bankruptcy, you need to have regular income and debt levels that fall under the set limit. You also need to be current regarding your taxes to qualify for a Chapter 13 bankruptcy. If you are unsure whether filing for a Chapter 13 bankruptcy is an option for you, an attorney will help you determine if you are eligible.

How Much It's Going To Cost

When you factor in legal representation costs and filing fees, a Chapter 13 bankruptcy isn't cheap. However, there are ways to pay for this type of bankruptcy filing. Many bankruptcy attorneys will let you make payments, so you don't have to cover all of their fees at once. How much your attorney charges will depend on their experience and the complexity of your Chapter 13 bankruptcy filing. Between filing fees and hiring an attorney, a Chapter 13 bankruptcy will usually set you back $2,500 to $6,000. Before starting the filing process, know how much you'll pay in fees.

If you plan to file for Chapter 13 bankruptcy, there are three things to know. First, you need to know the ins and outs of a Chapter 13 bankruptcy before filing. Second, you need to determine if you can qualify for a Chapter 13 bankruptcy. Finally, consider how much this filing will cost you before you start. 

For more information on Chapter 13 bankruptcy, contact a professional near you.