Many people associate bankruptcy with low-income levels and other similar financial struggles. In reality, the need for bankruptcy may have very little to do with a person’s income and more to do with the type and amount of debt that he or she has. Even people with substantial incomes may find it difficult to keep up with payments and effectively manage their debt.
Contrary to what some people think they know about bankruptcy, you can actually file for bankruptcy if you earn a regular income. Chapter 13 offers protection for Louisiana individuals who need to effectively deal with unmanageable debt and claim a stronger financial future free from creditor harassment.
Why Chapter 13?
Chapter 13 bankruptcy is also known as wage earner’s bankruptcy. If this is the right option for you, you will have the ability to submit a plan that you will follow in order to pay off your debts. It may be possible to negotiate for reduced balances as part of your plan to pay off eligible liabilities. In addition to an organized plan to deal with debt, Chapter 13 also offers the following benefits:
- Halts further contact from creditors upon filing
- Stops foreclosure efforts against your home
- Provides way to discharge eligible debts
- Allows you to keep valuable property
- Offers a way to obtain a fresh financial start
The Chapter 13 bankruptcy repayment process lasts three or five years, depending on the plan. Once you emerge from this process, you can enjoy the restoration of your financial freedom and have the ability to manage debts that were not eligible for discharge through bankruptcy.
Who is eligible?
Chapter 13 bankruptcy could be an option for individuals who are not eligible for Chapter 7 bankruptcy because of too much income. A person who applies for Chapter 13 will not be eligible if his or her unsecured debts are more than $383,175 (amount subject to change due to the consumer price index) or if that person has had a previous bankruptcy petition dismissed within 180 days due to failure to appear before the court or comply with the court.
Depending on the nature of your debt and your income level, Chapter 13 bankruptcy could be a beneficial choice for you. From understanding eligibility requirements to file your petition with the court, you will find great benefit in discussing your debt relief options with an experienced bankruptcy attorney.