There is no doubt that some sort of help with the finances is needed. In spite of what the debtor can think to do, there never seems to be enough money to take care of all the bills. With creditors calling daily, the time has come to think about filing for bankruptcy protection. Here are some reasons why talking with a bankruptcy attorney in Cornelius NC about filing a Chapter 13 bankruptcy may be the right thing to do.
What is a Chapter 13 Bankruptcy?
With this form of bankruptcy, the debtor is placed under the protection of the court. As the Bankruptcy Attorney in Cornelius NC will explain, all debts filed as part of the petition are repaid using a plan approved by and managed by the court. Unlike other forms of bankruptcy that liquidate non-exempt assets and settle the balance, this approach eventually repays every cent the debtor owes. In the interim, creditors work with the court and not with the debtor.
Who Qualifies for This Type of Bankruptcy?
The requirements for this type of bankruptcy are less demanding than other kinds. The individual will need a steady source of income that can be garnished by the court. In addition, the court must be convinced that even after allowing for the amount that will be sent for distribution to creditors every month, the debtor will still have enough to cover basics like food, clothing, and shelter.
How Long Will the Bankruptcy Last?
Depending on the amount of debt involved and how much the court determines the client can pay monthly, it could take between three and five years to settle everything. In the interim, it is in the best interests of the client to live on a cash only basis rather than accruing new debt.
What About the Credit Rating?
If the debtor is seeking protection from the court, chances are the credit rating is already damaged. A Chapter 13 bankruptcy will not immediately make things better. Over time, the current debt will be paid in full, and the bankruptcy action will no longer appear on credit reports. At that time, the debtor can begin to rebuild the rating. For anyone who feels as if paying off debt is no longer possible, Visit Lake Law Office, PLLC and talk with an attorney today. Seeking protection from the court may be the most practical way to settle the debts and have the chance to make a new start.
