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Chapter 13: Becoming familiar with bankruptcy

Many people in Columbia and the rest of the nation can accumulate enough debt that becomes too large to handle. For people struggling under the weight of debt, bankruptcy can be a viable option. Although previous discussion has occurred on the types of bankruptcy out there, a recent article addressed the details of a Chapter 13 bankruptcy in depth. Becoming familiar with this type can help one discover which way might be best to recover from a dire financial situation.

A few eligibility factors are taken into account when planning to file for Chapter 13. Self-employed individuals, married couples or even single people can apply provided they have unsecured debts totaling less than $360,475 and secured debts less than $1,081,400. A debtor must file three items: a petition of bankruptcy, a statement of financial affairs at a local bankruptcy court, and a schedule of assets and liabilities.

When the petition is filed by the courts, it prevents creditors from continuing collection action by use of what is called an 'automatic stay.' They cannot pursue lawsuits or any other collection actions during the period of the stay. A debtor is also required to submit a payment plan detailing how one will pay their debts during a period of three to five years. The payment plan has to ensure that fixed payments are provided to trustees regularly, whether it is once a week, twice a week or even monthly. Even if the payment plan has not been approved by the courts, a debtor is required to begin making payments within 30 days of the plan being filed.

If the payment plan is completed successfully, the debtor will be discharged of many of their debts. Not all debts will be discharged, including alimony, student loans and child support. However, even the smallest amount of debt relief for Columbia residents can help get people on the right track to begin managing their finances again. This is why Chapter 13 can be a viable and successful option for people struggling to make ends meet.

Source: The Quincy Cove, "Bankruptcy laws: What is chapter 13 bankruptcy?," July 27, 2012

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Reed Law Firm, P.A.
220 Stoneridge Drive,
Suite 301

Columbia, SC 29210

Phone: 803-726-4888
Fax: 803-726-4887
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Reed Law Firm, P.A.
1807 West Evans Street,
Suite B

Florence, SC 29501

Phone: 843-679-0077
Fax: 843-679-0667
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