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When filing for Chapter 13 bankruptcy, the court has the authority to lower the amount of disposable income you allocate to non-priority unsecured debts, such as credit card balances and medical costs. However, in order to lessen your liability under the "Best Effort Rule," you should be prepared to sell your property and give the revenues to your creditors.
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To pay down and discharge your secured and unsecured debts, file for Chapter 13 bankruptcy in Austin, Texas Bankruptcy carries a stigma, but if your obligations have gotten out of control, it can be your only remaining alternative. In actuality, the US Bankruptcy Code was enacted in order to give people who are deeply in debt a fresh start by removing some of their obligations. Chapter 13 bankruptcy can be your best alternative if you don't meet the requirements for the Means Test in order to file for Chapter 7. Filing for Chapter 13 bankruptcy in Austin, Texas, enables you to reorganize your debt and repay it over a three- to five-year period while being closely supervised by the court. The debtor may put all of their disposable income toward repayment as long as the repayment plan represents a significant portion of their total debt, if not their entire amount owed to the creditors. Under Chapter 13 bankruptcy Austin TX, there are three different kinds of debts. These are the following: Priority Debt: This category consists of alimony, child support, and tax liabilities. Secured debt is one which is backed by a piece of collateral, such as a home or car. If the loan is not paid, the creditor is entitled to take possession of the collateral.
Unsecured Debt: Debt without a collateral guarantee. The most prevalent type of unsecured debt is credit card debt. Professionals offering Chapter 13 bankruptcy Austin TX consulting services, like those offered by Recovery Law Group, may assist you all the way through the bankruptcy process and provide you with a chance for a new beginning financially. One of the main benefits of declaring bankruptcy is that it will instantly stop collection efforts and harassment by creditors. We'll draw together a repayment schedule that will allow you to pay off your bills over the course of three to five years. Any remaining unsecured debt will be erased upon the completion of the repayment plan, and you will not be able to collect it from your creditors. Chapter 13 repayment schedule Your debt must be under the Chapter 13 bankruptcy limitations in order for you to qualify for Chapter 13 bankruptcy Austin TX. Should your debt load be excessive, you won't qualify and can need to file for Chapter 11 bankruptcy on your own. Additionally, your monthly income ought to be sufficient to cover a sizeable portion of your creditors' monthly payments. If not, the repayment plan might not be approved by the bankruptcy court. Additionally, keep in mind that small firms and enterprises are not eligible for Chapter 13 bankruptcy in Austin, Texas. Best Effort Rule When filing for Chapter 13 bankruptcy, the court has the authority to lower the amount of disposable income you allocate to non-priority unsecured debts, such as credit card balances and medical costs. However, in order to lessen your liability under the "Best Effort Rule," you should be prepared to sell your property and give the revenues to your creditors. Your creditors must receive at least the same amount as the value of your nonexempt property in order for Chapter 13 to be effective. If not, your case could be shifted to Chapter 7, in which case your creditors will be paid by the trustee appointed by the court through the sale of your nonexempt assets.
