If you have a steady income, you might be a candidate for Chapter 13 bankruptcy. Chapter 13 bankruptcy involves the consolidation of outstanding debt. It also involves the consolidation of monthly payment obligations into one single bill. All of this is done in accordance with a court-approved Chapter 13 repayment plan that is designed to make your debt more manageable, while resolving any debt that remains following the term of the repayment plan.
A Chapter 13 payment plan is specifically tailored to your income and debt limitations. The bankruptcy court will take into consideration how much money you make each month and determine what you can reasonably afford to pay on a monthly basis over a period of three to five years. After that three- to five-year period, if you make your monthly payments religiously and on time, the bankruptcy court will dissolve the remaining debts that are covered under the bankruptcy.
Chapter 13 bankruptcy also benefits debtors because, during the payoff period, your debt will not continue to accrue interest or penalties. Additionally, if your wages are being garnished — or if you are being harassed by creditors — the automatic stay provided by your bankruptcy process will put both the wage garnishment and the creditor harassment to an immediate stop.
If you think you could be a candidate for Chapter 13 bankruptcy proceedings, a King County bankruptcy lawyer can help. At the Law Office of Ruth Nelson, we are available to review your debt situation to determine if you could benefit from filing for bankruptcy, or if you could benefit from employing another kind of debt resolution strategy.