One of the biggest things we note when we speak to clients about bankruptcies is that they could have saved themselves time, stress or money by seeking assistance sooner than they did. Clients put off the bankruptcy process for so many reasons, not the least of which is fear.
People fear bankruptcy because they don't understand it or because they don't want to have to deal with the consequences associated with it. Bankruptcy can seem shrouded in mystery and legal verbiage for those who don't know about the process. While it certainly can be complicated and you probably shouldn't try to undertake a Chapter 13 reorganization on your own, bankruptcy is also a well-laid-out legal process that is governed by a strict set of rules.
Those rules can make it scary, but once you get into the process with an experienced attorney, the rules are what protect you. One of the first rules you need to learn about is the one that governs whether you can file for a Chapter 13 bankruptcy.
To file for Chapter 13 bankruptcy, you have to meet certain financial qualifications. Your debts have to be below a certain threshold -- which is admittedly fairly high and easy to come in under for most people. You also have to be able to show that you make enough money to reorganize your debt and pay the trustee regularly. If you want to keep a home and car plus reorganize some of your debt for pennies on the dollar, you pay the trustee each month. If your income is $1,800 a month and you want to pay the trustee $1,500 of that, a judge probably isn't going to think that's realistic.
Our firm works with you to help you understand how and why you can or cannot file Chapter 13; if you can't file Chapter 13, we can work with you to seek other options such as a Chapter 7 filing.
Source: FindLaw, "Chapter 13 Bankruptcy Reorganization," accessed Nov. 18, 2016