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Law Office of Gordon Mosley
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Filing for personal bankruptcy under the Chapter 13 clause


As we all know, debts can accumulate over a period of time. This can make it difficult for a person to make ends meet when paying both monthly bills and debt payments. Many people try to save every cent so that they can be out of the debt as soon as possible, but sometimes paying just the interest on the debts can prove to be difficult. Another solution to reducing debt may be to sell their belongings to pay the debts, but again they may brush aside this solution because they don't want to lose their house or possessions.

However, living with overwhelming debt is difficult because creditors can be knocking at the door asking for payment. A stressed-out debtor will try to find other options but once these options have been ruled out, the last resort may be to file for bankruptcy.

Once bankruptcy is identified as the best available option to address these difficult financial times, they have to decide which chapter would be used for the filing. Most personal debtors prefer to make a filing under Chapter 7 or Chapter 13 bankruptcy rules.

To file under Chapter 13, the income of the person should be above the gross median for their location, but if it is below the median than the person will qualify for Chapter 7. To determine the person's income, the bankruptcy court will consider the person's wages and income for the past six months. If the person qualifies for Chapter 13, the person will be given a repayment plan.

Under Chapter 13, debtors have to reorganize and repay some percentage of debt during a three or five-year repayment plan. This plan is based on a payment formula, which if followed allows the remaining debt to be discharged when the repayment period ends.

There are various benefits and setbacks to filing a Chapter 13 bankruptcy. For more information, please visit our Chapter 13 bankruptcy page, which can provide information to help you understand all the options for repaying the debts and protecting your hard-earned assets.

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