Overcome Your Debts And Make Things Right With Your Creditors

Personal loans and credit card bills are considered unsecured debts. A home mortgage is considered a secured debt. If you have racked up numerous bills in both categories and can't afford to make monthly payments without some heavy sacrifices, you may think that your life will forever be burdened by your past financial mistakes. Chapter 13 bankruptcy is an option that will restructure your debts and allow you more time to pay them.

Learn About The Criteria Imposed

A chapter 13 bankruptcy differs from a chapter 7 bankruptcy in the fact that you will retain your property and will be given the opportunity to pay some or all of what you owe. Liquidation is the result of a chapter 7 bankruptcy and even though this gives an individual a clean slate and new lease on life, it can also be a major setback that will result in needing to start over and work hard to acquire the items that were lost through the bankruptcy.

If you are fearful that you will lose your home as a result of being behind on your mortgage payments, this worry will be eliminated with chapter 13. As long as you have not filed for bankruptcy in the past and have acquired enough debt to be deemed worthy of filing bankruptcy, you will be able to present your case in a court of law and could very well be given a new repayment plan for your debts.

Leave The Legalities Up To Your Lawyer

First, call a lawyer who handles bankruptcy matters and ask to speak with them privately about both chapter 7 and chapter 13 so that you have a good grasp on the differences between the two chapters. Let the lawyer know that you would like to regain your good standing with your creditors and that you do not wish to give up on your debts or lose your home due to foreclosure.

The lawyer who you choose will need to have a clear understanding of the amount of each bill that you owe, how long you have been a client with a particular creditor, and how you previously handled your debts. This will include how much money you normally paid to a creditor and how often a payment was made.

Let the lawyer know what changed your financial situation. If you were sick and unable to work or if you lost your job at one point, this will make it easy to see why you struggled to pay your creditors. If you are a viable candidate for filing chapter 13 bankruptcy, a repayment schedule will be discussed with you and your lawyer will petition the court, prior to your bankruptcy hearing.


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