Debt has the potential to destroy a person's quality of life. This can be due to the stress of making the large payments to creditors while also facing the risk of losing possessions and damaging your credit history. Depending on the size of these debts and your earnings, you may be in an impossible situation for repaying these debts. In these situations, it may be wise to learn more about bankruptcy protections:
Why Would You Want To File For Chapter 13 Bankruptcy Over Other Options?
There are many different types of bankruptcy protection that a person can seek. However, Chapter 13 protections can often be the best solution. Under this option, many of the debts will be restructured. When your debts are restructured, the courts will oversee negotiations between you and the creditors so that a fair payment plan can be arranged. In many instances, this will include reducing the debt burden to make it easier for individuals to make these payments.
How Will You Make Your Payments Under A Chapter 13 Filing?
As part of the process of filing for Chapter 13 bankruptcy, you will be assigned monthly payments that will have to be made to uphold your obligations under the bankruptcy order. You may assume that you will simply continue making these payments to your creditors. However, this is unlikely to be the case for your bankruptcy proceedings. Rather, it is more common for a trustee to be appointed, and you will make your payments to this party. Once the payments are received, the trustee will divide them among the various creditors according to the court agreement.
Will Secured And Unsecured Debt Be Treated Differently?
While there are many different types of bankruptcy filings, there are also numerous types of debts that individuals could accumulate. In particular, secured and unsecured debts are two of the more common. It is important to note that the bankruptcy system will usually treat these types of bankruptcy differently. In particular, it may be more likely to have assets that secure loans be liquidated or repossessed due to the fact that the creditor will have much stronger claims to these assets. Luckily, you will still have rights in these situations as you will be allowed exemptions under the bankruptcy filing. The rules governing these exemptions can be exceedingly complicated, but your bankruptcy attorney will be able to help explain these rules so that you can use your exemptions as wisely as possible.
Check out a website like http://www.haven-law.com/ for more information and assistance.