Understanding Chapter 13 Bankruptcy And Its Impact On Your Job

If you are struggling with debt, it can be overwhelming and might even leave you feeling hopeless. However, there are options available to you, such as filing for bankruptcy. While chapter 7 bankruptcy is often the first option that comes to mind, chapter 13 bankruptcy can also be a viable solution for those who have a steady income and want to repay their debts over time. In this blog, we’ll explore what chapter 13 bankruptcy is, how it can affect your job, and the benefits of filing for it.

What Is Chapter 13 Bankruptcy?

Chapter 13 bankruptcy is also known as a “wage earner’s plan.” It allows an individual with a regular income to create and follow a repayment plan that lasts for three to five years. The goal of this plan is to repay some or all of their debts in an affordable manner. In order to qualify for chapter 13 bankruptcy, an individual must have a steady income that is enough to pay for their necessary living expenses and a portion of their debts. This can be a good option for those who have assets they want to protect, want to avoid liquidating their assets in chapter 7, or are not eligible for chapter 7 due to previously filing for bankruptcy.

Will Filing For Chapter 13 Bankruptcy Affect My Job?

One of the biggest concerns individuals have when considering filing for bankruptcy is whether it will affect their job. While there are no guarantees, in most cases, filing for chapter 13 bankruptcy should not have any negative impact on your current job. Employers are generally not notified when an employee files for bankruptcy, and if a creditor garnishes your wages prior to filing, the bankruptcy court will put a stop to the garnishment.

Benefits Of Filing For Chapter 13 Bankruptcy

One of the biggest advantages of chapter 13 bankruptcy is that it allows individuals to keep their property. Unlike chapter 7 bankruptcy, in which assets are often sold to pay off debts, chapter 13 bankruptcy allows individuals to keep their assets as long as they continue to make their regular payments. Additionally, chapter 13 bankruptcy can stop foreclosure proceedings and even allow individuals to catch up on their missed mortgage payments gradually.

Another benefit of chapter 13 bankruptcy is that it can help individuals rebuild their credit over time. While a bankruptcy filing can stay on your credit report for up to 10 years, making regular payments on time will show creditors that you are responsible and can be trusted with credit again. Additionally, those who file for bankruptcy are often able to start rebuilding their credit right away, especially if they have already been struggling with late payments and missed bills.

If you’re struggling with debt and need help, chapter 13 bankruptcy may be a good option for you. It allows you to create a manageable repayment plan that works for your budget and helps you keep your assets. Additionally, it shouldn’t have a negative impact on your job, and can even help you rebuild your credit over time. At Tadross Law, we’re here to help Philadelphia residents navigate the bankruptcy process and get back on their feet. Contact us today to learn more about our bankruptcy services.