If you are having trouble paying your debts and have exhausted other options, filing for bankruptcy can help you start over with a clean slate. For people who do not have enough income to repay their debts, Chapter 7 bankruptcy is an option. In this type of bankruptcy, certain assets are sold, and the proceeds are used to pay creditors. If you earn too much money to qualify for Chapter 7 bankruptcy, you may be able to file for Chapter 13 bankruptcy relief. This type of bankruptcy gives you the opportunity to propose a payment plan that reorganizes your debts. Your plan must be confirmed by the court, so follow these tips to ensure you don't run into unnecessary delays.
1. If you accept a new job before your plan is confirmed, make sure the job does not pay less than you made when you proposed the plan. When you submit your proposed repayment plan, the court reviews it to make sure it is realistic. You must be able to prove that you have enough income to follow the plan as it is written. If you propose a plan and then accept a job that pays much less than your previous job, the bankruptcy trustee is likely to wonder if you will be able to afford your plan payments.
2. Let your attorney know if your income increases. Income increases are usually a good thing, but they can complicate your bankruptcy case. If you get a new job that pays more than your old job, tell your Chapter 13 bankruptcy attorney right away. Any increase in income can affect the amount you are required to pay to your creditors each month. If necessary, your attorney will work with you to revise the proposed repayment plan before your confirmation hearing.
3. Make sure the proposed plan includes all the debts you are required to repay. In a Chapter 13 bankruptcy, some debts are considered more important than others. They are known as priority debts. A priority debt cannot be discharged in a bankruptcy, so you are required to repay it. Examples of priority debts include unpaid taxes and court-ordered child support. If you mistakenly leave one of these debts out of your repayment plan, the plan may not be confirmed.
If you have been struggling to pay your creditors, filing for Chapter 13 bankruptcy could help you see the light at the end of the tunnel. Bankruptcy law is complex, so be sure to work closely with your attorney to ensure that there are no delays in having your repayment plan confirmed.Share
30 January 2019
Hello, my name is Neil Gamford. Welcome to my site about bankruptcy proceedings. After my divorce, I was left near penniless and without a place to stay. I was paying all of my income to alimony and my remaining debts. Although I had a solid payment plan in place, it was getting difficult to cover my financial obligations without a home. Luckily, I met with a bankruptcy attorney, who helped me find a way to discharge my debts and start over. I hope to share the information I learned throughout that process with you through this site. Please feel free to visit anytime.