After trying multiple strategies for bringing debt under control and failing to do so, it is obvious that bankruptcy is the only option. While a Chapter 7 bankruptcy is the best choice for some people, others are better served by seeking a Chapter 13 in Topeka, KS. Here are some reasons why this approach may be in the best interest of the debtor.
Dealing with Priority Debts
Bankruptcy laws do make distinctions between different types of debts. Some cannot be discharged in a Chapter 7 bankruptcy action outside of a narrow range of circumstances. Debt like income taxes, child support, and student loans are examples of what is known as the priority debt. The attorney will look closely at any priority debt the client carries and determine if it meets the limited criteria for discharge. If not, the best way to prevent liens and other legal actions is to file a Chapter 13 in Topeka, KS, and include all those priority debts in the details provided to the court.
There is a better chance of retaining all property and assets by filing a Chapter 13. With a Chapter 7, a court trustee will look over the property and holdings of the debtor and determine if any of those assets are eligible for sale under current bankruptcy laws. If so, they will be sold and the funds distributed among the creditors before the rest of the debt is discharged. For people who wish to keep their property and make monthly payments to the court, a Chapter 13 will make it possible to pay off the outstanding debt in three to five years.
Desire to Repay Debt
There are people who do qualify for a Chapter 7 but opt for a Chapter 13 instead. The reason is simple: the debtor wants to repay the debt but cannot manage it without the protection of the court. While the financial circumstances of the individual may mean that the creditors only receive a portion of the original amount owed, they will, at least, get something. That can make the debtor feel a little better about filing for bankruptcy.
For anyone who is deep in debt and can’t get out, click here and talk to an attorney today. After exploring all the options, the legal counsel can help the client make an informed decision about what to do next.