When debts become overwhelming, there are many people who prefer to declare bankruptcy. The type of bankruptcy will depend on the needs of the individual and their income. For example, people with little income remaining when the month ends and less assets choose chapter 7. This option wipes out qualifying debt within 4 to 6 months without needing to pay creditors. When considering chapter 13 Monterey residents need to know what it entails.
People who earn significant income or those who want to protect their valuable property tend to file for chapter 13. For being offered the debt relief, the filer pays their discretionary income to creditors. That happens over a period of 3 to 5 years. There are a number of reasons why people opt for chapter 13. In the first place, it helps with foreclosure. It will help in saving a home from being foreclosed.
Normally, banks will require borrowers to pay back the mortgage arrears in full. For individuals or families which are struggling financially, the payment of the arrears in full might not be possible and thus they could lose the home. Chapter 13 debtors can dictate how the repayments are to be done. If there are amounts which are past-due, they will be broken down into small bits which are easily manageable. They are to be paid over the life of the plan.
When one chooses this option, it will help in mortgage modification. It will not just be possible to dictate to a lender the terms under which to pay past-due payments but it will also be possible to have the mortgage modified. As a rule, first mortgage should not be modified but it is possible to modify the second and third. The modification is done through a process called lien stripping. After a mortgage gets stripped, the loan will be paid by the debtor.
The advantage of this option over chapter 7 is as regards credit report of the individual. Chapter 13 bankruptcy will be shown on the credit report for just 7 years while for chapter 7 it will be there for 10 years. What that means is that creditors will know you did file for bankruptcy in the case of chapter 7, with the impact being more serious.
There are some requirements before one is deemed to qualify. One thing to understand first is that there are limits of debt that one can have. The unsecured and secured debts are not supposed to get past some amount. In case the debts are too much, one will not qualify. The other requirement is that you are supposed to prove that you have a steady income. Having a steady income means you need to afford your monthly expenses and still be able to make repayments.
This option is never available for companies. That means that only individuals are eligible. Nevertheless, business-related debts which one is personally responsible for can be part of the plan. That means that a sole proprietorship will be able to benefit.
Upon completion of the repayment plan, you will need show the courts that you are current on alimony obligations and child support. You should also have completed the counseling course. With those requirements met, the remaining balance on qualifying dischargeable debts will be wiped out.
People who earn significant income or those who want to protect their valuable property tend to file for chapter 13. For being offered the debt relief, the filer pays their discretionary income to creditors. That happens over a period of 3 to 5 years. There are a number of reasons why people opt for chapter 13. In the first place, it helps with foreclosure. It will help in saving a home from being foreclosed.
Normally, banks will require borrowers to pay back the mortgage arrears in full. For individuals or families which are struggling financially, the payment of the arrears in full might not be possible and thus they could lose the home. Chapter 13 debtors can dictate how the repayments are to be done. If there are amounts which are past-due, they will be broken down into small bits which are easily manageable. They are to be paid over the life of the plan.
When one chooses this option, it will help in mortgage modification. It will not just be possible to dictate to a lender the terms under which to pay past-due payments but it will also be possible to have the mortgage modified. As a rule, first mortgage should not be modified but it is possible to modify the second and third. The modification is done through a process called lien stripping. After a mortgage gets stripped, the loan will be paid by the debtor.
The advantage of this option over chapter 7 is as regards credit report of the individual. Chapter 13 bankruptcy will be shown on the credit report for just 7 years while for chapter 7 it will be there for 10 years. What that means is that creditors will know you did file for bankruptcy in the case of chapter 7, with the impact being more serious.
There are some requirements before one is deemed to qualify. One thing to understand first is that there are limits of debt that one can have. The unsecured and secured debts are not supposed to get past some amount. In case the debts are too much, one will not qualify. The other requirement is that you are supposed to prove that you have a steady income. Having a steady income means you need to afford your monthly expenses and still be able to make repayments.
This option is never available for companies. That means that only individuals are eligible. Nevertheless, business-related debts which one is personally responsible for can be part of the plan. That means that a sole proprietorship will be able to benefit.
Upon completion of the repayment plan, you will need show the courts that you are current on alimony obligations and child support. You should also have completed the counseling course. With those requirements met, the remaining balance on qualifying dischargeable debts will be wiped out.
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Find an overview of the benefits of consulting a Chapter 13 Monterey attorney and more info about a reliable lawyer at http://www.centralcoastbankruptcy.com today.
