Making sense of Chapter 13

Filing for bankruptcy is never an easy task. The prospect of losing all your assets coupled with the overwhelming sense of failure can take a toll on anyone. Although times can be stressful, it is important to weigh all your options at hand before making a decision to file for bankruptcy.

The two most common bankruptcies are Chapter 7 bankruptcy and the Chapter 13 Bankruptcy. Each of these has their own pros and cons. However, Chapter 7 is fairly straightforward, where most of your assets are liquidized in order to pay off the creditors. While the Chapter 13 is more complex and includes organizing your debts and designing a suitable repayment plan that agrees well with your creditors.

Credit counseling course

You are required to take a credit counseling course six months before you file for bankruptcy. This course will help you assess your options, while giving you enough time to look for viable alternatives to pay off your creditors.

Once you are educated about the consequences and the repercussions, your attorney will help you draft a Chapter 13 bankruptcy petition. This will include a huge volume of paper works that clearly defines your financials, debts, assets, and other necessary information that the court requires to come to a viable conclusion on your behalf.

Asset status

Once you file a bankruptcy, the court then assumes ownership over all your possessions, thus bringing into effect an automatic stay on your assets. This will get most of your creditors off your back.

Chapter 13 Bankruptcy

The court will also appoint a credible trustee who will formally notify all your creditors about the bankruptcy and the stay on your assets. The trustee is also responsible for overseeing your repayment plan and ensuring that the proposed payments are collected and distributed to the creditors on time.


You will have to begin repaying your creditors a month after filing bankruptcy, in accordance with your repayment plan. It is important that you adhere to your repayment plan as agreed upon. During this time, is necessary for you to submit documents that establish your income and expenses.

During the time of your payment is it necessary for you to complete a course on personal financial management, in order to prevent such mishaps from happening in the future. Once your payments are made, the court closes your case. Get in touch with an experienced attorney at the earliest.

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