From the oldest bankruptcy law firm in Minnesota, since 1972, comes Kain & Scott to explain what you need to know about filing Chapter 13 Bankruptcy. Very few people realize the government actually has a government sponsored debt consolidation plan. It’s called a Chapter 13 Bankruptcy. And if you knew how it works, no one would do traditional debt consolidation.
Here is what you need to know about filing a Chapter 13 Bankruptcy:
Chapter 13 Bankruptcy and Your Creditors
First, while you are in the Chapter 13 Bankruptcy, no creditor can collect from you. You are legally shielded from your creditors. This little perk is better than traditional debt consolidation where creditors are not barred from collecting from you while you are in it. Many guests are startled to find out that a creditor can garnish your wages, levy your accounts, and sue you while you are in traditional debt consolidation. Not so in Chapter 13 Bankruptcy.
Second, the payment you make back to your creditors, is based on what you can afford to pay. In traditional debt consolidation, you are going to make a huge payment or your creditors will garnish your wages and levy your bank account. Creditors eat first you eat second. In Chapter 13 Bankruptcy, your family eats first and creditors eat second. The payment is typically much smaller.
Third, in the vast majority of Chapter 13 Bankruptcies, not all debt gets paid in full. If you have say, 100k in credit card debt, and only 10k gets paid over the plan, the balance of 90k gets wiped out, tax free, forever! Brilliant? We think so!
Fourth, a Chapter 13 plan lasts a minimum of 36 months and a maximum of 60 months, no longer and no shorter than this!
When the time is right or when you are ready, reach out to Minnesota’s oldest bankruptcy law firm, since 1972, at www.kainscott.com. You will be so happy you did!