Defeat Bankruptcy

Chapter 13 Bankruptcy Law Protects Your Assets

A lot of people tend to file bankruptcy as a quick way to get out of debt when in fact, it’s not so. While Chapter 13  bankruptcy law does offer some recourse to debt, it is by no means a quick fix for the situation. Chapter 13 bankrupty allows you to reorganize your finances so that you can slowly pull yourself back up and out of debt. If you’re keen to overspending and living above your means, then under Chapter 13 bankruptcy law, you may lose some if not all of your precious luxuries.

Now, you always have the option of liquidating your owned assets to pay back your creditors. Chapter 13 bankruptcy law does, however, protect those assets that you need to survive. This generally includes a home on which you still owe 80% or more of your mortgage balance, a vehicle with a value of $2,000 or less, and up to $2,000 in the bank. Additionally, Chapter 13 bankruptcy law makes provisions for any educational funds you have for yourself or your children, and your IRAs or pensions are exempt as well.

Keep in mind when filing that Chapter 13 bankruptcy law requires that you repay your creditors as ordered by the court. You will have to submit a predetermined amount of your monthly wages as repayment of your debt. And because this is a requirement, you will have to actually qualify for Chapter 13 bankruptcy. In some cases, you may qualify for Chapter 7, in which case you will be given the option to file that particular chapter or withdraw your case altogether.