Digging yourself into a hole when it comes to debt is not something you expected. Getting that first shiny credit card was exciting, but now many years and cards later, you find yourself unable to make minimum payments timely.
Bankruptcy may turn out to be a good option for some people. One avenue to explore is Chapter 13 bankruptcy. While a chapter 13 lawyer orlando fl can go into more detail, these three facts may give you a general idea of what it means.
1. The Trustee
Filing a claim for bankruptcy in court is the first step in getting help. You could afford to pay some of these debts if you could eliminate others or reduce interest and late payments. Once you file in court, a trustee is assigned. This person is the go-between and works with you and creditors to reach an amicable solution. Creditors are informed of the proceedings and have a chance to file claims with the trustee.
2. The Payment Plan
Chapter 13 involves the development and implementation of a reasonable payment plan. The trustee works to reach a figure with the creditors that you can afford to pay timely. During the payment plan period, typically lasting three to five years, you must not miss any payments. This could affect the bankruptcy discharge at the conclusion.
3. The Bankruptcy Discharge
Once you abide by the terms of the payment plan for the time allotted, the court may consider a discharge of the remaining debt. It is likely you could not pay everything off under the payment plan. As such, anything left after you meet the conditions fo your plan is wiped away. Chapter 13 bankruptcy impacts your credit, but since you made payments, it does not linger as long as Chapter 7.
Only you can choose to file bankruptcy. If this process helps get you back on sound financial footing, you may want to meet with a professional for more information.