Do you have a money problem that your income is unable to solve? You can think about submitting a Chapter 13 bankruptcy petition, which is often available to those with a steady source of income. In this bankruptcy, the debtor develops a repayment plan to pay back all or a portion of their obligations. This plan normally lasts a few years and is subject to judicial approval. The debtor is shielded from unfavorable financial consequences during this period. How does the law protect you in this arrangement?
1. The Automatic Stay
When you file for Chapter 13 bankruptcy, creditors are immediately prohibited from bringing any kind of legal action against you. Repossession and legal actions go under this. The automatic stay is a strong kind of defense that provides much-needed breathing space for debtors.
The next step is to consult with a Chapter 13 bankruptcy service to develop a solid debt repayment strategy. A Chapter 13 repayment plan is the name of this strategy. Creditors who go against the automatic stay may be penalized and punished in contempt of court.
2. Defense Against Foreclosure:
Foreclosure protection is another benefit of Chapter 13 bankruptcy. With Chapter 13, you may catch up on missing mortgage payments throughout the course of your repayment plan, which will benefit you if you're behind on your payments.
3. Creditor Abuse Is Ended:
The continual nagging from creditors is one of the most annoying aspects of managing debt. But after you submit a Chapter 13 bankruptcy petition, any abusive behavior that qualifies as harassment must stop.
These could include unwanted phone calls, overt or covert threats, and humiliating behaviors like disclosing your financial position. Your counsel or the bankruptcy court must be consulted for all correspondence. Creditors who go against the automatic stay may be penalized and punished in contempt of court.
4. End of Wages Garnishment:
If you are having trouble with wage garnishment, Chapter 13 bankruptcy may be able to assist. The automatic stay will stop wage garnishment after you file, providing you with much-needed respite.
5. Protection For Certain Family Assets:
Certain inheritances, such as life insurance earnings that would otherwise be used to settle debts, are also protected under Chapter 13 bankruptcy. This implies that even in the middle of your financial difficulties, your loved ones may be confident that they will get what you planned for them.
Chapter 13 bankruptcy may be a viable choice for you if you're in financial trouble. It may help you get back on track and provide a variety of safeguards. As you work to get things back on track, speak with Chapter 13 bankruptcy services to see what legal protections are available to you.
