Chapter 13 Bankruptcy
Experienced Colorado Springs Chapter 13 Bankruptcy AttorneysFor millions of adults who qualify, bankruptcy can be a financial lifeline that either allows the discharging of all unsecured debt, or allows a fair repayment plan that is tied to an applicant’s ability to pay. But in all cases, bankruptcy is a legal process that changes the equation when it comes to what a person owes and how that person will handle those debts. If you have questions contact our Colorado Springs Chapter 13 Bankruptcy Attorneys today.
We have always viewed bankruptcy that is handled in the proper way as a means by which our clients can get a second chance to rewrite their financial future. But the biggest question we deal with is which type of bankruptcy — Chapter 7 or Chapter 13 — makes the most sense for our clients. That isn’t always an easy answer, but in the case of Chapter 13, our client’s ability to pay creditors is a major deciding factor.
What Is Chapter 13 Bankruptcy?Chapter 13 bankruptcy, also known as ‘wage earner bankruptcy’ allows individuals who have a steady and reliable income to set up a repayment plan to eliminate most or all of their debt. Although it varies from state to state, you typically have three to five years to complete the repayment. If you are approved for Chapter 13 bankruptcy, there are steps that must be followed, including:
- Paying a Trustee a Monthly Fee &mdash The trustee is in charge of your bankruptcy and distributes your payment to your creditors per your repayment agreement.
- Trustee Sends You Statements &mdash These statements show exactly how much money you’ve paid each creditor, and how much is still left to pay.
- Provide Trustee With Annual Income and Expenses &mdash At the end of each year, you must give the trustee an annual statement of your income and expenses. This is to ensure that you have not earned additional income that could be used to pay your creditors more than what was originally agreed.