Naturally, financial struggles come with a lot of anxiety. Worse still, unresolved debts can make you insolvent. Luckily, filing for bankruptcy is an effective way to resolve a debt crisis. One of the options available in such a situation is chapter thirteen bankruptcy. It involves creating a debt repayment plan that is within the specified period. After that, you'll get a fresh financial start. But you'll need to speak to a bankruptcy lawyer before going to court. They will help you assess your financial situation and determine if it is the right time to file. Here are instances where chapter thirteen bankruptcy might be a great choice.
When a Creditor Has Moved to Court
When someone or an organization lends you money, they expect you will honor the terms and conditions of the loan and return it at the right time. Failure to hold your part of the bargain can prompt your lender to take stringent measures against you. For instance, they can seek the intervention of the court. This move is detrimental and has numerous financial implications, such as loss of assets. In addition, you risk getting your wages garnished. So, you should avoid waiting until your lender goes to court. Instead, get a lawyer and seek legal advice when a creditor threatens to litigate the matter.
When You Have Not Paid for a Secured Debt
You may also consider filing for chapter thirteen bankruptcy if you cannot repay a secured debt for one reason or another. For example, it is time to file if you have a mortgage on your home but have missed several payments due to financial struggle. Remember that failure to act can prompt the mortgage lender to initiate the foreclosure process. And once the process is in motion, you risk losing your home. Filing for chapter thirteen helps you prevent property repossession.
When You're Having Trouble Balancing Your Budget
Assessing your spending habits keenly before filing chapter thirteen bankruptcy is prudent. Filing might be necessary if you have been struggling with bills for the past few months and cannot seem to balance your finances. With the help of a financial advisor, your lawyer will better understand your financial books. Then, they can determine whether you can bounce back from your financial situation or need a debt restructuring program.
Chapter thirteen allows you to reorganize your life and become debt-free. Speak to a lawyer about adopting this plan. It will help you resolve your financial crisis and have a fresh start financially.Share
8 September 2022