Chapter 13 Bankruptcy Options

If you are filing chapter 13 bankruptcy, it is important to understand why chapter 13 is the correct form for you and just what your chapter 13 options are. Two chief reasons why chapter 13 would be advised by a lawyer are if you possess a valuable asset like a home, and you have a reliable and sufficient source of income. In the question why chapter 13 is the right choice for you, the type and amount of your debts is a determining factor. Unsecured debs like credit card bills and medical bills usually fall under the bankruptcy laws of chapter 7, while secured debts like mortgages, or other financial obligations such as alimony, child support, taxes and government fines are covered by chapter 13 bankruptcy laws.

These are vital pieces of chapter 13 bankruptcy information you need to know. Your debt-income ratio is another determining factor in the question why chapter 13? If the means test proves you will have enough income to fulfill a payment plan on your debts, you will likely be able to keep some assets like your home while a portion of your income is allotted to you monthly payments. It’s also imperative to understand what your chapter 13 options are. Chapter 13 options you should take into account are portions of your estate that could be bankruptcy exempt, like pension funds, and certain types of government bonds. Other chapter 13 options to consider are a court-supervised negotiation of your debts to adjust either the principal sum, the interest or the duration of the loan. Changes to one or more of these factors can result in a lower monthly payment that is financially feasible for you.