Many people have misconceptions about what filing for bankruptcy in the form of Chapter 13 in Topeka KS entails. Those misconceptions may lead them to avoid obtaining this protection against creditors when they are overwhelmed with debt. For instance, they may believe that all types of bankruptcy involve not repaying their outstanding debts, and they may not feel comfortable with that. Chapter 13, however, is a program that allows people up to five years to pay back most or all of the money they owe while keeping up with current obligations. This is extremely helpful when someone had significant financial hardships for a time but has since begun making more income or has fewer expenses. They cannot handle the payment creditors are now demanding, but they could pay off those debts if allowed extra time.
The second misconception about Chapter 13 in Topeka KS is that it cannot provide any tax relief. Sometimes this is true, but not always. Some individuals are allowed to discharge income tax they still owe for previous years, as long as they filed their returns. A third misunderstanding of Chapter 13 is that it cannot stop foreclosure on a home. In fact, this is a very effective way for people to keep their home and pay back their arrears. The program was established by federal law so U.S. residents who have regained some financial footing don’t have to face losing everything because of previous monetary problems.
Bankruptcy attorneys typically provide free initial consultations, so there’s no harm in learning more about these programs. Even if someone is sure the debt could not possibly be paid off in five years, Chapter 13 might still be an option if creditors agree to reduce the amount owed. That is common since they know they will still receive most of the money. If the individual files Chapter 7 instead, the amount the creditors obtain will be substantially less since there is no extra time to make payments. A lawyer such as Business Name guides clients through the complicated process of filing for bankruptcy so they can begin the process of rebuilding their financial health.
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