Chapter 13 bankruptcy is a wise option for those who are financially struggling but have a steady income source that can be used to pay some of their debts. Chapter 13 allows the individual to reallocate and consolidate his or her debts, and then pay them back more efficiently. It is easy to get into financial trouble in today’s uncertain economic environment. To get a better idea of how a repayment plan might look, you may consider filing Chapter 13.
What Are the Actual Debts I Will Have to Pay Off?
Not all debts will be treated the same way or considered equal during bankruptcy proceedings. There are certain debts that might not require full repayment. Your attorney and the court will assess your debts and then divide them into different categories. You will be able to choose whether your debts are prioritized for repayment or forgiven.
- Secured Debts: These debts are secured by collateral such as an auto loan or a home mortgage. A Chapter 13 bankruptcy can require an individual to repay the collateral’s value or to repay the entire debt.
- Unsecured Debts: These debts are the lowest on the Chapter 13 debt ladder. They include medical bills, credit card bills, and unsecured personal loans. These debts may be reduced or discharged before bankruptcy cases are closed.
This post was written by Trey Wright, one of the best bankruptcy lawyer Jacksonville FL! Trey is one of the founding partners of Bruner Wright, P.A. Attorneys at Law, specializing in bankruptcy law, estate planning, and business litigation.
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