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Chapter 13 bankruptcy process

The decision to seek assistance has been made, and the Kentucky resident can now begin to breathe a sigh of relief. Deciding to seek financial relief through bankruptcy can be a difficult decision to make because many individuals do not really know what bankruptcy entails and the benefits it can provide. In considering whether to file for Chapter 13 bankruptcy, one will want to review the basics to determine if this is the appropriate choice.

The first step in determining if Chapter 13 is the best option is to take a look at current debts. Then, the individual will need to compare the amount owed to the amount of income received. Chapter 13 allows the individual to reorganize the debt and establish a payment plan. If the debt amount is too great as compared to income, this may not be the best choice.

Once one takes a look at the debt to income ration, he or she will want to take a look at the total value of property owned. A certain amount of this property is typically exempt. This may need to be considered in the repayment plan as well.

Finally, the individual will need to complete the appropriate paperwork and submit it to the courts. This paperwork needs to be completed as completely and accurately as possible. Experienced legal counsel can prove to be invaluable in this process. Then, after the Kentucky resident completes everything, he or she will meet with the bankruptcy trustee.

The final part of the Chapter 13 bankruptcy process involves a confirmation hearing during which lenders can voice any concerns that they have. Once the bankruptcy has been confirmed, the individual begins making payments according to the established repayment plan. At the end of the repayment plan period, any remaining unsecured debt may be discharged.

Source: FindLaw, "Chapter 13 Bankruptcy Law Checklist", Accessed on Feb. 5, 2017

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