Chapter 13: Saving Assets

Chapter 13 can provide individuals with the aid they need in overcoming financial distress. All forms of bankruptcy, including this one, can be life changing. They can help an individual to overcome his or her financial frustrations and to start a successful future. There are many incidents in which individuals struggle to pay their bills due to poor money management, high health care debt or from other mistakes. the key to remember is that taking this step does have lasting results, but not doing anything about your debt can also hurt you for years to come. Making this decision is a hard one, but it is one you need to make.

Protection of Assets

If you are a homeowner who has equity in their home or you are the owner of other types of valuable assets, Chapter 13 is the right route for you to take. In other forms of bankruptcy, including total liquidation, all of your excessive assets are sold. The funds are then sent to your creditors equally. Because of this, you lose many of those unprotected assets. This could include your home, vehicles, family heirlooms of value and other items. There is a level of protection in place through the system, but if you own assets, consider this chapter the best one for you.

Qualifications

For those who are considering Chapter 13 bankruptcy, the good news is that the qualifications for obtaining this type of debt forgiveness is much easier than other forms. You do not have to meet strict income qualifications (in fact, those that make too much to file 7 will qualify here.) You also do not have to meet other limiting factors. You will need to have income coming in to the home to file. In this form, you will spend three to five years repaying your debt to your creditors up to a certain percentage or, in the case of vehicle loans, in total. Therefore, you do have to have income.

Keep in mind that there are still steps you must take. You cannot abuse the system. You cannot file Chapter 13 more than one time every six to eight years, depending on state laws. You cannot hide assets or file misleading information with the court. You do have to keep up on your payments or the entire case is thrown out and you start all over again. This method can have lasting results on your credit, including being on your credit report for the seven years following discharge.

All of these things do add up, but filing Chapter 13 does get creditors to stop calling you. It does help many people to get out from under a debt burden they cannot manage. It can also help individuals to get a fresh financial start while still paying back much of the money they owe and while protecting their assets. All of this can help you to overcome the financial distress you are in so you can move forward.