Relief from overwhelming debt can sometimes seem impossible, but there are many options available to consumers. Chapter 13 bankruptcy can be a good choice for South Carolina debtors who may not otherwise qualify for Chapter 7. This type of bankruptcy puts consumers on a repayment plan while also protecting them from collection attempts.

Before filing for Chapter 13, debtors must first go through credit counseling. Individuals may move forward and file for bankruptcy once this is completed, and they must also provide information regarding debt, income, personal expenses and both unsecured and secured debts. Secured debts — such as car loans or mortgages — are considered priorities to be repaid in full through Chapter 13 bankruptcy repayment plans. Unsecured debts — such as credit cards — may only have to be partially repaid, although the exact amount will differ between debtors.

Debtors must also provide the bankruptcy court with a copy of their repayment plan. This plan must not only include plans to fully repay the aforementioned secured debts, but must also outline how unsecured debts will be repaid. The amount of unsecured debt a person must repay must typically equal the valued amount of a person’s nonexempt property. This type of property usually includes business interests, real estate properties, artwork and more. The Chapter 13 plan must be approved by the court.

Missing a Chapter 13 payment can be costly, unfortunately, and may lead to a possible dismissal. Still, most South Carolina consumers who pursue this type of bankruptcy protection can follow their court-approved repayment plan. Upon completing their repayment plans, consumers are usually left standing upon surer financial footing.

Source: FindLaw, “Chapter 13 Bankruptcy Rules FAQ”, Dec. 11, 2017