If you are falling behind on your mortgage or car payments and are struggling to make ends meet, filing for Chapter 13 bankruptcy with the help of a bankruptcy attorney may solve many of your financial problems. Upon completing the process, you will be able to keep your home and avoid foreclosure. However, this unique type of filing is not for everyone; if you can identify with the following scenarios, you may qualify for Chapter 13 bankruptcy:
A Chapter 13 bankruptcy will not be able to wipe away credit card debt. Instead, this type of filing can help you keep your home and car by focusing the court’s efforts on modifying loans that are backed by property. Secured debts, such as mortgages, home equity lines of credit, and car payments, can be restructured using terms that are favorable to your pocketbook.
If you hold a job that provides you with disposable income at the end of every paycheck, this filing could be for you. Chapter 13 is uniquely designed to benefit those who earn a steady income or may even earn more than the average salary in the state. A consistent flow of money ensures your creditors that your debt will be paid off and allows the court to negotiate a fair repayment settlement with your income in mind.
Current Tax Payments
Another important bar to qualifying for Chapter 13 is being current on all of your taxes. This type of filing requires you to show proof of federal and state tax returns going back at least four years from the bankruptcy filing date. Neglecting to pay income taxes may disqualify you from Chapter 13.
If you are having trouble making mortgage payments or are undergoing foreclosure, filing for Chapter 13 bankruptcy could help you keep your home. Each financial situation is different and a bankruptcy attorney can truly assess which bankruptcy option might be right for you. Illinois residents in need of legal counsel should call the bankruptcy attorneys with Dixon & Johnston, P.C. at (618) 233-1103. Our team can help make the bankruptcy process work for you.