Bankruptcy is considered by many people as a last resort to get relief from debt. It does help relieve debt, but chapter 13 bankruptcy in St. Louis, MO also helps people move forward. This option for bankruptcy can prevent the foreclosure of a home, repossession of a car, and end harassment over student loan debt.
How It Works
Filing for chapter 13 bankruptcy in St. Louis, MO provides people the opportunity to make up mortgage payments, take care of any income tax debt, and bring car payments up to date. Other creditors will be paid off as well, often at reduced rates. Payments are made over a sixty-month time period to cover outstanding debt.
The amount of the payments is based on current income and any other assets. The determination is designed to be affordable so as many people as possible can qualify and participate. Payments are made to a bankruptcy trustee who distributes the money as agreed upon in the judgment.
How to File
Filing for bankruptcy is a complicated process. Lack of information, forms filled out incorrectly, and no proof of previous efforts to honor debts can delay a decision. It can also result in the bankruptcy not being approved. The best thing to do is consult an attorney.
An experienced attorney will review the situation, explain the differences in bankruptcy options, and advise clients on which course of action could be the more successful. The attorney can also prepare all the paperwork and file them with the court.
Important Considerations
People who are participating in chapter 13 bankruptcy cannot incur any debt during the sixty-month repayment period. That means no loans and no credit cards can be issued. Some agreements are contingent on those in debt completing money management seminars or credit counseling programs to avoid further problems with debt.
There are cases where creditors can object to a debt settlement. It is rare that they do because they want to reduce their losses, but it is possible. That does not mean the judgment will exclude that portion of debt, but it may have an effect on the monthly payment amount. People in severe debt can go to Stlbankruptcyfirm.com to explore debt relief possibilities with an attorney.
