Sometimes personal debt becomes so overwhelming that there doesn't seem to be any end in sight. Creditors may be harassing you for payment, your bank may be threatening foreclosure on your home, or perhaps you have been visited by one or more repossession agents. Your financial situation has become desperate, and you're looking for a way out. One option that you may want to consider is filing for Chapter 13 bankruptcy.
Chapter 13 vs. Chapter 7
Chapter 13 bankruptcy differs greatly from Chapter 7. Under Chapter 7 bankruptcy, you are immediately cleared of your debts, though you are required to liquidate some of your property to cover the debt. Under Chapter 13, you do not have to give up any of your property and will instead pay back the debts by drafting a repayment plan. Under the repayment plan, you will make periodic payments from your income on a regular basis until the debt is paid off. Chapter 13 therefore requires that you have sufficient disposable income to pay back your debts over time.
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Drafting Your Repayment Plan
When drafting a repayment plan, there are many factors to consider. One important thing to remember is that your creditors do not have to approve of your repayment plan; only the court must approve. With the help of a bankruptcy lawyer, you may be able to negotiate your debt so that you end up paying back a percentage of what you originally owed. You must consider how much disposable income you have to put towards your debt each pay period, how frequently you can make payments, and how quickly you will be able to pay off your debt. Payments are usually make on a biweekly or monthly basis over a period of 3 to 5 years.
Achieving Financial Freedom
Creating and committing to a long-term repayment plan will require discipline and perseverance. You may have to forgo some creature comforts and rethink your spending habits. If you are successful though, you will be debt free and will have made it out without having to sell your property. Consulting with a bankruptcy lawyer ahead of time and drafting a detailed, realistic, comprehensive repayment plan is the first step toward making your dream of financial freedom a reality.
Learn More
For more information on Chapter 13 bankruptcy and drafting a repayment plan, please visit the website of experienced Milwaukee bankruptcy attorneys at the DeLadurantey Law Office, LLC today.
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