When most people think of bankruptcy, they often think of someone having all of their assets repossessed, including their home. While that is what happens with chapter 7 bankruptcy, there are other forms of bankruptcy. North Carolina residents may be interested in learning about chapter 13 bankruptcy, which basically allows a person to pay back their debt while holding onto their assets.
If an individual files chapter 13 bankruptcy, there will likely be some stipulations. Most individuals are required to attend credit counseling. The counselor will work with the individual who is filing for bankruptcy and will help them create a repayment plan that is reasonable for their budget.
The majority of plans will include provisions for an individual to pay less than the total of their debt. The court will need to make sure that the plan is acceptable. The creditors also play a role and have the opportunity to reject a plan if they do not feel it is acceptable. Based on feedback from the court and creditors, the plan may need to be modified. After modifying a plan, the individual who filed chapter 13 bankruptcy will then be responsible for making regular payments to a trustee. The trustee will then distribute those payments to the creditors.
With a chapter 13 bankruptcy, most individuals are able to hold onto their assets, including their home. In order to hold onto their home, though, they must stay current on their mortgage payments and the payments they make with their repayment plan.
Some individuals feel overwhelmed because of the amount of debt they have. An individual might opt to discuss their circumstances with an attorney. The attorney may be able to answer questions about different forms of bankruptcy and debt relief and help stop creditor harassment on the client’s behalf.