Working one or two jobs to barely afford basic living expenses is an unfortunate reality for many people. Perhaps you are struggling with getting out of debt or trying to keep your home out of foreclosure or your vehicle out of repo status. Of primary concern is your income is too high to pass the Chapter 7 bankruptcy means test but too low for you to get caught up on your bills.
Many people who are unable to qualify for Chapter 7 find that Chapter 13 bankruptcy protection is more beneficial to their circumstances. Before you file for any type of bankruptcy protections, take some time to consider how Chapter 13 may improve your circumstances.
Restructures debts to make them more manageable
Unlike Chapter 7 which eliminates or forgives certain debts, chapter 13 requires debtors to enter into a three-to-five-year structured repayment agreement with their creditors. The payment plan essentially lowers the amount of debt to a more reasonable amount to bring your accounts current during the repayment term. This is often beneficial because it allows debtors to pay a lower amount over time to get caught up on their delinquent financial obligations.
Prevents foreclosure and repossession
Filing for chapter 13 bankruptcy does not mean you automatically have to give up your vehicle or home, especially if they are in foreclosure or repo status respectively. Chapter 13 allows you to retain possession of those assets by making payments according to the payment schedule in your bankruptcy declaration.
Do not let your fear of having income keep you from exploring debt relief options. A bankruptcy attorney can review your circumstances and educate you on financial resources to help improve your financial situation and give you the fresh start you desire.