Those who are struggling with debts while earning a significant income are usually overwhelmed by complex cashflow issues. For them, selling their assets may not be necessary because they have a sufficient income to pay off their debts. However, the high-interest rates and constant creditor action can be hindering the process.
In these situations, filing for Chapter 13 bankruptcy, otherwise known as a wage earner’s plan, can be a great option. Chapter 13 bankruptcy allows debtors to halt all actions taken from creditors through the creation of an automatic stay. In addition to this, they are granted the opportunity to reorganize their debts into a repayment plan that is spread over 3 to 5 years.
If you think that Chapter 13 bankruptcy could be a great option for you, it is important that you understand how to prepare for the filing.
Preparing for a Chapter 13 filing
To adequately prepare for a Chapter 13 bankruptcy filing, you will need to get organized. It’s paramount that you create a comprehensive list of all of your creditors and the claims that they have against you. You will also need to give comprehensive details of your income streams, as well as the amount and the sources of your income. Tax information should also be provided, and this should also include a copy of your most recent tax return. A detailed account of your monthly living expenses need to be included so that a realistic repayment plan can be achieved.
If you believe that filing for Chapter 13 bankruptcy could help you to gain a fresh financial start, you should conduct further research into the reality of the filing.