Filing Chapter 13 Bankruptcy in Wagoner County is a great tool for those facing financial problems. If you’re considering filing for bankruptcy, you need to know what kind of bankruptcy you are going to file.  The vast majority of individuals or families file either a Chapter 7 or a Chapter 13 bankruptcy.

The Chapter 7 is what most people think of when they hear the word bankruptcy.  With a few exceptions, including student loans, child support, and back taxes, it eliminates all of your debt.  This includes credit card bills, medical bills, payday loans, repossessions or foreclosures, and any other debt that the court may discharge.  It is the most common form of bankruptcy.  A Chapter 13, instead of just wiping everything out, requires that you pay back at least a percentage, if not all, of what you owe your creditors.  So why would anyone do that?

Chapter 13 Bankruptcy: Reasons to File

FIRST

There are two main reasons for filing chapter 13 bankruptcy in Wagoner County instead of a Chapter 7.  First, you do not qualify for a Chapter 7.  In order to file a Chapter 7, you have to meet certain requirements.  First, you cannot have filed a Chapter 7 in the last eight years.  Second, and the thing that trips most people up, you have to meet certain income requirements.  Specifically, you cannot earn more than an amount determined by the size of your family and the county you live in.  Barring unusual circumstances, if you make more than the set number, you must file a Chapter 13.  This is because you have enough income to pay back at least a portion of your debts.  This is the reason most Chapter 13 cases file.

LET US DISPEL SOME OF THE MYTHS OF BANKRUPTCY.  SEE OUR ARTICLE HERE.

SECOND

The second reason for filing Chapter 13 Bankruptcy in Wagoner County is far less common, but to the people who use it, much more important.  Chapter 13 bankruptcy can stay a foreclosure on a home.  When an individual or family gets behind on a mortgage, the amount that is past due is called an “arrearage”.  An arrearage is a secure debt, just like the mortgage.  In a Chapter 13, secured debts, such as cars and arrearages, must be paid in full by the plan.  The whole mortgage doesn’t necessarily need to full payment, but the entire arrearage does.

Therefore, a family who is several months behind on their mortgage payments and facing foreclosure can file a Chapter 13 bankruptcy.  This will grant the ability to pay off the arrearage over the course of the plan, as long as five years.  When the bankruptcy concludes, the arrearage will be fully paid and the family will be current with their mortgage.  This, of course, is contingent upon the family being able to make the required payments for the life of the plan.

Bankruptcy Help in Wagoner

Chapter 13 may be a necessity for some.  However, for others it can be a critical tool to save a family home.  If you are facing foreclosure and are considering bankruptcy, contact your local bankruptcy attorney today.