Dealing with personal finances is stressful enough without fighting your way through legal terms and requirements. Understanding how Chapter 13 bankruptcy works may initially appear like a challenging task, but with the professional help of a bankruptcy lawyer in Santee, CA, your situation will soon look a whole lot clearer.

Before the time comes for your first consultation, here are a few vital pieces of information that will help you prepare and assess your position.

How much does Chapter 13 reduce debt?

Filing for Chapter 13 bankruptcy may differ from case to case depending on whether you’re filing as an active military member or you’re declaring bankruptcy as an unemployed individual. One thing is solid, however: This bankruptcy plan is designed to help you repay your debts through monthly installments over the course of three to five years.

Does Chapter 13 reduce what you owe?

Chapter 13 plan divides debt into three categories: secured debt, priority unsecured debt, and general unsecured debt. All debts other than priority and secured ones are considered to be general unsecured debts.

The federal laws that govern bankruptcy don’t allow the discharge of certain priority debts, such as child and spousal support and certain income, payroll, and sales taxes. Whatever reason you may have had for failing to repay some of these priority debts, you will still remain liable for paying any remaining balance.

If you want to reduce your monthly payments after the court has already approved your Chapter 13 plan, you can file a motion to modify it. You will need to schedule a hearing date, provide a written declaration explaining why your plan payment should be reduced, and propose an amended Chapter 13 plan to the court, the appointed trustee, and your creditors.

What happens after you pay off Chapter 13?

After you’ve successfully made all monthly payments required by your Chapter 13 case, you must go to the bankruptcy court for your final discharge hearing. If you can’t attend this meeting, you can send your bankruptcy attorney in your place.

At this court meeting, the judge will review every detail of your case and confirm that you have satisfied all of the requirements set out in your Chapter 13 plan. If there are no objections from any of your creditors, the judge will then discharge your case.

How does Chapter 13 affect my credit?

One of the common concerns many debtors have about declaring bankruptcy relates to the effect of Chapter 13 on their careers and credit. Luckily, this matter is not as serious as you may think.

If you’re considering declaring bankruptcy, you have probably been struggling with your debts for quite some time. If that is so, these financial difficulties have likely left a mark on your credit score already. It’s good to know that filing bankruptcy will probably not reduce your score much more.

On a side note, in case you’ve been wondering, choosing a Chapter 13 over a Chapter 7 bankruptcy won’t have much of an impact when it comes to preserving your credit score.

Dependable Santee legal professionals are closer than you think

It’s time to finally spend some time with your family and friends in the Santee Lakes Recreation Preserve while a reliable bankruptcy lawyer in Santee, CA takes care of your bankruptcy. Clear your mind and rest before the time comes to work on your case. With the help of experienced legal representatives from the offices of Chang & Diamond, your financial troubles will be over soon.

The safest way to secure your future is to find partners you can trust. Contact us today and let us help you take your first steps toward a debt-free life you deserve.