Filing for bankruptcy is never an easy decision. One of the most common fears that those considering bankruptcy carry is that they will have to forfeit their belongings and the life that they’ve fought to build in the process. While this is a well-founded fear in many respects, the good news is that under a Chapter 13 bankruptcy, a debtor can work toward paying off and discharging all his or her debt while retaining most or all personal property.
Chapter 13 is specifically designed to help those with a dependable income avoid having to liquidate assets to discharge debt. When a debtor pursues a Chapter 13 discharge, he or she must demonstrate an income that can support paying off debt. Unlike a Chapter 7 liquidation, a Chapter 13 discharge requires the debtor to repay all his or her secured debts within a regimented repayment schedule.
Unsecured debts may also be repaid, but can often be settled for pennies on the dollar. In order to qualify for Chapter 13, a debtor must demonstrate that his or her income can support repaying these debts within a span about three to five years, among other qualifications. Because the debtor is actually fully repaying most or all of his or her debt, it is not necessary to forfeit much or any personal property.
If you think that a Chapter 13 discharge may meet your financial needs, don’t hesitate to reach out to an experienced attorney to review your eligibility for this procedure. An attorney can help guide your through the qualifications and prepare you to make the most of the process as you rebuild your financial life.