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Things to consider when filing for Chapter 13 bankruptcy

When many people begin to investigate the different types of bankruptcy protection and debt relief, it can become quickly evident that the options are varied and complex. Depending on a person's unique situation, the best "fit" with regard to debt relief can vary. A recent article describes some ways for those in Washington to evaluate if filing for Chapter 13 bankruptcy is the right option.

First, It is important to understand some of the challenges of filing for bankruptcy. Under Chapter 13, debts are paid out of a person's disposable income (which is whatever a person has left after paying for necessities such as food, medical care, shelter, etc). Also, filing for bankruptcy will not relieve a person of child support, alimony or student loans. Finally, it is not possible to file for Chapter 13 if, in the previous 180 days, he or she had a Chapter 13 or Chapter 7 claim that was dismissed due to a violation of a court order or if the case was dismissed because a creditor sought relief from the automatic stay and legal proceedings.

While these considerations may seem to paint a bleak picture, there are still several advantages to filing for Chapter 13 bankruptcy. For example, trustees in charge of the proceedings are often flexible on the terms of the payments. This can allow a person to stretch payments out and reduce the amount of what they owe. In addition, under a Chapter 13 plan, filers are allowed to hold on to any property that they are making payments on, unlike a liquidation bankruptcy.

Filing for Chapter 13 bankruptcy does not have to be accompanied by a death toll. There are many ways that individuals in Washington can work through financial difficulties and emerge financially strong when seeking debt relief. Many facing this decision turn to experienced bankruptcy attorneys for counsel in order to understand the best options for their unique financial situations.

Source: FindLaw, "Pros and Cons of Declaring Bankruptcy under Chapter 13", Accessed on Nov. 16, 2016

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