Some people may think that declaring bankruptcy is like admitting defeat, or may see it as a sure path to losing everything. However, it can be a helpful tool for those dealing with debt. Under the federal bankruptcy code, there are different types of bankruptcy. If you are eligible for Chapter 13 bankruptcy, your lawyer may be able to help you work out a payment plan while protecting your most important assets.
If you are struggling with debts and other financial obligations, you may have a path forward with Chapter 13 bankruptcy. Call our Chapter 13 bankruptcy attorneys at Allmand Law Firm for more information on Fort Worth Chapter 13 bankruptcy eligibility.
What Is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy, also called reorganization bankruptcy, is designed to assist individuals who are struggling with debts but earn sufficient income to make partial or full repayments. If a person in Fort Worth qualifies for Chapter 13 bankruptcy, their debts will be reorganized, and they will agree to a payment program. After making monthly payments over a period of three to five years, this process allows for the cancellation of many remaining debts.
Though the repayment plan requires discipline, Chapter 13 bankruptcy offers many advantages to those who are eligible. One major advantage of Chapter 13 is that the payment plan can be structured to protect certain secured assets so that creditors cannot foreclose on a home or repossess a car. Overdue payments can become part of the payment plan, while unsecured debt, such as credit card payments, may be eliminated or reduced through forgiveness programs.
Like other forms of bankruptcy, Chapter 13 does not eliminate everything. Debts that cannot be included in a bankruptcy proceeding include:
Declaring bankruptcy can also affect credit scores and make it harder to borrow money in the future. However, since it protects some of the most important assets, Chapter 13 is a more desirable option if you can qualify.
Who Is Eligible for Chapter 13 Bankruptcy?
Sometimes known as the wage earner’s bankruptcy, Chapter 13 bankruptcy is not available to everyone. To qualify for Chapter 13, you must:
- Show proof of steady income
- Have not previously filed for a Chapter 13 bankruptcy within the past two years
- Have not filed for a Chapter 7 bankruptcy within the past four years
- Be up to date on tax filings
- Have unsecured and secured debt that does not exceed the statutory limits, which are adjusted to reflect changes in the consumer price index
An experienced Fort Worth attorney could examine your situation and advise you on whether you meet the requirements for Chapter 13 bankruptcy eligibility.
Contact a Fort Worth Attorney About Chapter 13 Bankruptcy Eligibility
If you are struggling with overwhelming debt, you may feel that your situation is hopeless. However, there are options available to you, and our bankruptcy team at Allmand Law Firm is here to help you explore them.
Depending on the specifics of your situation, you may have a legal pathway to getting out of debt without giving up assets that are important to you, such as your home. If you are ready to learn more about Fort Worth Chapter 13 bankruptcy eligibility, contact us today.
