Compelling Reasons To File For A Chapter 13 Bankruptcy For Your Debt

5 January 2021
 Categories: , Blog


Debt can quickly take over your life and put your income and assets at risk. Despite your best efforts to pay it off on your own, you may still find yourself seriously behind on bills. You also may find yourself dealing with collection letters and lawsuits that creditors file against you.

Instead of dealing with your debt on your own, you can take legal action to resolve it more effectively. You can start by filing for a Chapter 13 bankruptcy that will stop collection attempts against your income and assets.

Organizing Your Debts

When you file a Chapter 13 bankruptcy, you effectively organize all of your debts into one lump sum. Your lawyer can file a case in federal bankruptcy court asking the court to consolidate all of your debts together. This organization stops creditors' attempts to collect individual debts against you.

Once the amount of your debts is consolidated, the court and your lawyer will then determine for how long that you must pay on that single amount. In most cases, debtors have up to six years to pay off their consolidated debt. At the end of that time period, however, the court may liquidate or write off the rest of any debts that remain.

Stopping Collection Attempts

Another reason to take out a Chapter 13 bankruptcy involves stopping all collection attempts against you. Once your lawyer files your case in court, the court notifies your creditors that you are filing for bankruptcy. By law, they can no longer try to collect on debts that you to them. They must release all garnishments and levies. They also cannot, by law, call, write, email, or text you.

If they break this order of protection barring them from collecting or notifying you, they could be held in contempt of court. They also may be ordered to forgive your debt and pay your court costs.

Finally, Chapter 13 bankruptcy allows you a fresh financial start with little to no debt left on your record. You can renegotiate payments on debts like student loans that cannot be forgiven through bankruptcy. You can also use your bank accounts and save for retirement without the fear that your money will be seized.

Chapter 13 bankruptcy can offer benefits to people in debt. It reorganizes your debt and gives you several years to pay them all off. It also stops collection activities like garnishments and levies. Visit a site like