Financial problems impact Maryland residents for diverse reasons. Unemployment and underemployment hurt families during tough economic times, and unexpected medical bills can quickly wipe out savings for individuals with health crises. Others may simply make bad decisions with their assets and may struggle to stay afloat as they move into the future.
No matter the reason, financial stress and strain can be hard on individuals and their loved ones. It is important that they understand their debt relief options, as well as their rights to seek protection through bankruptcy. This post will discuss Chapter 13 bankruptcy as an option for struggling debtors and the repayment plan requirement of the process. This post does not offer any legal guidance to its readers.
Repayment of creditors under Chapter 13 bankruptcy
Repayment plans are at the heart of Chapter 13 bankruptcy proceedings. To qualify for Chapter 13 bankruptcy, a debtor must have some disposable income with which they can repay their creditors. That disposable income is what their repayment plan will use to satisfy their outstanding debts.
A repayment plan must meet several criteria to be approved. It must be filed in a timely manner after the start of bankruptcy proceedings, and it must be approved by the bankruptcy court. It must lay out a schedule for repayment and it must cover priority creditor claims. Debtors must also include secured creditor claims if they want to keep the property attached to it through and after the bankruptcy process.
Getting through the bankruptcy process
Completing Chapter 13 bankruptcy can take time and energy. Not all debtors have confidence in their abilities to handle and manage the process on their own. They can always choose to work with bankruptcy and debt relief attorneys for guidance and support. Bankruptcy can take individuals out of dark financial problems and help them reestablish their strong financial footing.