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Why might you consider using Chapter 13 bankruptcy?

If you earn too much money to qualify for Chapter 7 bankruptcy, another option is Chapter 13. Chapter 13 bankruptcy is different than liquidation bankruptcy, because it does not require you to give up anything. You are asked to make regular payments to your creditors based on the arrangement that the court approves.

Chapter 13 bankruptcy can help you in a few ways. It can stop foreclosure. It stops harassing phone calls. It also gives you a chance to pay a more reasonable amount every month.

Chapter 13 bankruptcy is sometimes described as a wage-earner's plan because you probably still have a decent income. The idea is that this bankruptcy can reduce your overall debt payments, much like a consolidation loan would. However, at the end of the three-to-five-year term of the bankruptcy, any remaining debts are discharged.

Can creditors still call once you're going through bankruptcy?

No, they cannot. Federal bankruptcy laws state that creditors cannot start or continue collection efforts once you're going through bankruptcy. The reason for this is because creditors are required to approve your repayment plan. If they continued to harass you, it would be unfair.

If creditors who did not know about your bankruptcy reach out to you, you can direct them to your attorney's office. Your attorney can then speak with them about what can or cannot happen in regards to your bankruptcy.

Chapter 13 can be a good plan for you if you earn too much to go through Chapter 7 bankruptcy. Your attorney can talk to you more about it and if it's something you want to pursue.

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