Choosing The Right Course of Action

About four years ago, I could tell that things were turning south with my business. Cash flow was tight, and customers simply weren't coming back to shop some more. I realized that if I was going to keep my house, I would need to do something to resolve my finances. Although it was scary, I decided to meet with a bankruptcy attorney. After I explained my situation, he helped me to understand the process and how to tell if it was a good idea or not. When I decided to do it, things started changing for me right away. This blog breaks down bankruptcy in layman's terms, so that you can decide whether or not it is right for you.

Why Would You Pursue A Chapter 13 Bankruptcy?


Chapter 13 bankruptcy is a process that's designed to help debtors buy more time to get control of their situation. It's distinguished from Chapter 7, the next most common form of bankruptcy, by the fact that the goal is to restructure your debts in order to keep paying. If you're in a financial pickle that you just need some time to bounce back from, Chapter 13 is a choice you'll definitely want to learn more about. Here's what you need to know before you talk with a Chapter 13 bankruptcy attorney.

What Becomes of Debts

The debts held against you by creditors continue to be valid throughout the Chapter 13 process. This means there is no discharge of debts until you get to the very end of your repayment schedule. As long as you conform to the repayment schedule, the court will let you off the hook for any remaining balance. However, it's rare that a creditor doesn't get the bulk of what's owed to them when Chapter 13 is properly completed.

Restructuring Payments

The big thing that you, as the debtor, get in Chapter 13 is a restructuring of your debts in a payment schedule that fits your available income. Notably, you will have to prove to the judge presiding over your case that you have the means necessary to continue paying once your debts have been restructured. If you don't, the court may deny your petition and encourage you to pursue the Chapter 7 process. That might lead to the liquidation of a lot of your assets.

Your schedule will include a set term for completion. These schedules usually range between 3 and 5 years for Chapter 13 cases.

Keeping Your Property

With very few exceptions, a debtor gets to keep the property in question during a Chapter 13 bankruptcy. This makes the process especially interesting to parties who are trying to hold off foreclosures on their homes. The same applies to other items that are bought on loans, such as cars.

Stopping the Hounding

When a motion to have a case heard is granted, it is accompanied by a stay. This stay ensures that creditors who are listed in the filing cannot continue to hound you for repayment of debts. If it is necessary to address a situation with one of your creditors, you should direct any who do call you to take it up with your attorney.


24 April 2019