If you are thinking about filing for bankruptcy, you need to review all of your options. After all, everyone is in a unique position and what works well for one person is not always the right move for another. Many people who want to address personal debt benefit from Chapter 13 bankruptcy, but there are a number of issues to consider when it comes to this strategy, such as repayment plans.
By filing for Chapter 13, people can repay some or all of their debt. However, a repayment plan is necessary and it is important to review how long these repayment plans last.
Understanding the duration of a repayment plan
According to the United States Courts’ website, Chapter 13 repayment plans last from three to five years. In fact, repayment plans cannot last for longer than five years and creditors are unable to pursue collection. When someone filing for Chapter 13 has a monthly income that is above the state median, the repayment plan will typically last for five years. In cases where an individual has a monthly income that falls below the state median, the repayment plan will likely last for three years.
Understanding the importance of making regular payments
When it comes to Chapter 13 repayment plans, making regular payments is essential. Sometimes, payments are deducted from an employee’s pay, while some people make payments to a trustee in other instances. Either way, it is essential for debtors to fulfill their obligations and ensure that the plan succeeds. By satisfying obligations and staying focused, Chapter 13 helps many people find financial freedom.