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What are some important pieces of information an individual should know before they decide to file for Chapter 13 bankruptcy in Fort Walton Beach?

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Chapter 13 bankruptcy may be a good option for certain individuals in north Florida and the Fort Walton Beach area. It is essentially a way for people (not businesses) to pay off outstanding debts from money earned at their job without losing their home or experiencing other major disruptions. 

Getting ready to file and deciding if Chapter 13 is right for you

When preparing to file for chapter 13, the applicant has to pay a few hundred dollars worth of administrative and filing fees. Your attorney may add this to your legal bills. It is also necessary to provide proof of income and other evidence that shows an ability to pay down the debt in a reasonable time. As a precautionary measure, some individuals should also check with credit repair services or debt consolidation to make sure chapter 13 is really necessary as opposed to a simpler plan to pay down common consumer debts. It is a good idea to talk to financial professionals along with your lawyer before committing to a bankruptcy proceeding. 

Requirements to file and complete the program

Some of the rules and restrictions that are important to keep in mind regarding Chapter 13 are as follows:

  • The person must have less than $394, 725 in debts from things like credit cards and other unsecured sources, as well as no more than $1.1 million owed from mortgages, car loans, or other secured debts. 
  • The person must file as an individual and not as a corporation or other entity. 
  • Things like unpaid taxes, student loans, child support, and alimony payments cannot be discharged through bankruptcy.
  • All debts included in the chapter 13 case must usually be resolved within about five years.
  • The person filing for chapter 13 needs to demonstrate that they will have consistent income that will allow them to pay off their debts. This can be from wages, government benefits, and a number of other sources.
  • The courts will look at a complete summary of income sources and all debts before approving the plan to pay down the debts over the next few years.

One of the main reasons a person can benefit from a Chapter 13 filing is that they will not lose their house. They can remain as long as all mortgage payments are made after the bankruptcy process has begun. 

What else should be considered before filing? 

Keep in mind that filing for bankruptcy can be a life changing decision that will affect your finances and lifestyle for years to come. It is important to retain some kind of counsel to make sure you do not make any costly mistakes. That is why it is important to trust only the most experienced and thorough attorneys to help guide you through this process. 

Learn more about Chapter 13 and file today

To speak with an attorney about Chapter 13 bankruptcy or other financial issues in the Fort Walton Beach area, contact ASG Legal. Their attorneys are available to explain how this process may help based on your personal situation.