Finances can become tight, even for those who are making a decent wage. All it takes is too much overspending to get there, thinking that the money will always come in. But even when the money is coming in, and it’s not enough to pay all of the bills, it’s time to consider reorganizing your debts through a Chapter 13 in Topeka, KS. The advantage to this chapter of bankruptcy is the fact you retain your assets while still paying down your bills, and take less of a hit to your credit rating in the long run.
As a general rule, Chapter 13 is used by those who make more money than the median income for the state. While being over the median is not necessary an automatic entry into this chapter of bankruptcy, it does make it more likely. Chapter 13 works like this: your costs of living are determined, totaled up then subtracted from your income. What is left over is considered to be disposable, and is used to pay your creditors during the bankruptcy. The amount that is paid to creditors is is determined in order of priority. A secured asset, such as a home mortgage, is paid before an unsecured asset, such as a credit card. This amount is set and paid for three to five years. At the end of the bankruptcy, the remaining balance is discharged.
This chapter of bankruptcy forces your creditors to take the offer you give them. The reason for this is that there can be no collection activity whatsoever. No cars can be repossessed, nor can a home be foreclosed upon. Since your creditors would rather get some money rather than nothing, they have to come to the table if they want to get paid something. It may wind up that some creditors don’t like the terms and try to negotiate a different payment. This is acceptable under a Chapter 13 in Topeka, KS, but eventually the creditor has to come to an agreement or risk sanctions by the court.
Take the time to discuss your bankruptcy options with a lawyer before making a final decision. Having a clear picture of how bankruptcy can affect your life helps you make the decision to move forward.
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