Bankruptcy is considered one of the last resorts for individuals struggling with debt in the U.S., so the idea of being ineligible for bankruptcy might be a startling concept. But bankruptcy is not a one-size-fits-all process, and being ineligible for one type may not necessarily mean you are ineligible for another. At the Behm Law Group, we can help you determine what type of bankruptcy meets your needs, and for many individuals in Waseca, MN, Chapter 13 bankruptcy may just be the best option.
The Basics of Chapter 13 Bankruptcy
Chapter 13 bankruptcy, also known as wage-earner bankruptcy, is a method of breaking your debt down into manageable payments where you pay only a portion of it over time with no interest, late fees or penalties. Unlike Chapter 7, the time period for repayment is longer, usually three years. In some cases, your repayment plan may extend out to a maximum of five years. During this time, your pay cannot be garnished, and your property cannot be repossessed and the money in your bank accounts cannot be seized. In a sense, it’s like hitting the pause button on your debt and taking the time you need to emotionally and mentally decompress and to get things back in order. This means your home, car, and other assets will not be at risk of being taken to satisfy your debts.
Qualifications for Bankruptcy
As relieving as a big pause may sound, not everyone is able to utilize Chapter 13 bankruptcy. You do have to meet certain requirements in order to file. First and foremost, you must have a stable income that will be capable of meeting the payment requirements for the assigned amount of time. This is where the name wage-earner bankruptcy originates.
There is also a limitation on how much debt you can hold in order to file for wage-earner bankruptcy, broken down into secured and unsecured debts. A bankruptcy lawyer can help you navigate and calculate where your debt falls, but if you’re a billionaire, Chapter 13 bankruptcy is not for you. You will also need documentation substantiating your monthly income and your monthly living expenses, such as tax documents, bank statements, mortgage statements, and more.
Because of the meticulous documentation requirements, having a bankruptcy lawyer on your side makes the entire process much simpler and much more successful.
If you’re a Waseca, MN area resident in need of bankruptcy support or more information on wage-earner bankruptcy, Behm Law Group has the Chapter 13 bankruptcy lawyers you need to get started and on the road to financial recovery. Contact us at (507) 387-7200 or by email today.
