Why Abiding by Chapter 13 Repayment Plan is Essential?

  • Bankruptcy Chapter 13

Why Abiding by Chapter 13 Repayment Plan is Essential?

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Filing for bankruptcy is probably one of the worst decisions anyone must take. Admitting that you were unable to manage your finances properly can be quite humiliating. However, once you have decided to go ahead with it, you should ensure that you get a discharge for your debts. Chapter 13 bankruptcy offers debtors a chance to reorganize your debts and pay some portion of it over a period of 3-5 years through a repayment plan. The court-approved plan is an excellent way to get rid of debts and get back on track financially.

Los Angeles based bankruptcy law firm Recovery Law Group, lawyers inform that the repayment plan is based on your disposable income. However, once the plan is approved, it is essential that bankruptcy filer ensures that payment is made to the bankruptcy trustee every month. In case, he/she is unable to follow the repayment plan, they will be facing consequences far worse than before.

Inability to stick to the repayment plan might result in the dismissal of bankruptcy which will cause creditors to resume all sorts of collection actions (repossession, foreclosure, wage garnishment, etc.). to ensure that things remain on financial track, the debtor must follow financial restrictions and avoid making unnecessary expenses. Certain debts like child support or alimony are not discharged even after bankruptcy. Thus, the debtor must ensure that these obligations are met along with the repayment plan. Adding on new debts is something that debtors should avoid. In case, some urgent requirements arise, consulting with bankruptcy trustee is recommended.

If, after following the plan for some time, the debtor finds it too restrictive, they can also request the court to modify the repayment plan to a more feasible one. This can be done only if the debtor shows good faith gesture to go ahead with the plan, despite facing financial difficulty.

In case you have decided to go ahead with Chapter 13 bankruptcy, but are unaware of the finer nuances, it is important you seek consultation with experienced bankruptcy lawyers. You can call 888-297-6023 to discuss your case with qualified professionals.