Financial struggles happen for many reasons, and often it is because of factors beyond a Pennsylvania consumer’s control. A medical emergency, job loss, pay cut or other unexpected life event can wipe out savings, and eventually, it can become difficult to manage basic monthly payments, such as the mortgage. This may lead an individual to consider the benefits of filing for bankruptcy.
Chapter 13 bankruptcy is a practical option for individuals who earn enough income to make payments and are therefore not eligible for other bankruptcy options. This specific plan restructures debt, and the applicant will make payments on his or her debt over a period of three to five years once the court has approved the plan submitted. One of the important benefits of Chapter 13 is that it allows a consumer to deal with secured debt, such as a mortgage or vehicle payments.
There is no required liquidation of assets in Chapter 13 bankruptcy. Consumers who file for this relief can also benefit from the court’s automatic stay, which halts all contact from debt collectors and creditors and bars them from all attempts to collect any debt pending the further order of the court. An assessment of the individual financial situation, including types of debts owed and income, can determine if this is a beneficial option.
Chapter 13 bankruptcy can give an overwhelmed Pennsylvania consumer the ability to regain a financial footing after months or years of struggling. Speaking with an experienced attorney can help a consumer understand all of the options available. Before making an important decision that could impact long-term financial interests, it is beneficial to carefully consider all options that may be available.