What everyone should know about chapter 13 bankruptcy

South Carolina residents who are dealing with large amounts of debt may consider bankruptcy as an option to bring relief to their situation. Chapter 13 bankruptcy is sometimes referred to as Wage Earners’ bankruptcy. It could be an ideal solution for an individual who has a good income but is struggling to pay creditors.

This form of bankruptcy is best understood if it is looked at as a reorganization bankruptcy. It lasts for either three or five years. It gives an individual the opportunity to pay their creditors over a set amount of time. One benefit with this option is that a person will be able to hold onto their assets, like their vehicle or home.

When a person is ready to begin filing for this form of bankruptcy, they will need to go through credit counseling. The next step is filing for bankruptcy. Then a court-appointed trustee will work with the individual in drawing up a repayment plan with the goal of completely wiping out their debt. The time that is needed to accomplish this goal will depend on the person’s income.

Some wonder if there is a specific income limit that is related to chapter 13 bankruptcy. There is no limit in the amount of income a person can earn. However, there is a limit in the amount of debt that a person can have. When it comes to secured debt, a person cannot have more than $1,184,200. When it comes to unsecured debt, a person cannot have more than $394,725.

When a person feels overwhelmed by their debt and is considering bankruptcy, they may decide to speak with a bankruptcy attorney. An attorney who specializes in bankruptcy might be able to advise their client on which type of bankruptcy is right for their situation and can help them fill out the necessary forms in order to file. They may be able to represent their client in court if necessary.