If you have insurmountable debts you may have decided to consider filing for bankruptcy by filing for chapter 13. There are numerous advantages of filing for chapter 13. One of which is that you may have the opportunity to prevent your home from being seized by the bank, in order to pay for your debts, which is a process called foreclosure. In fact, even if your current home is already marked for foreclosure, activating it will suspend any foreclosure procedures which are being pursued. While you won't have to settle all of your debts if you file for bankruptcy using this method, you will still be required to pay regular mortgage payments, if you do want to keep your family home.

The Two Main Ways For Filing Bankruptcy In The US

There are currently two ways that you can file for personal bankruptcy in the United States, you can file for either chapter 7 or chapter 13. One of the reasons why filing for chapter 13 is a more popular option than opting to invoke the rules of chapter 7, is that you won't be forced to liquidate all of your assets. If you are aware of some of the major benefits of opting for chapter 13 but are looking for information on the things that cannot be done if you file for chapter 13, simply continue reading.

Do keep in mind that if you want to file for bankruptcy as a business owner, the process which you'll need to follow is different and you will not be able to invoke either chapter 7 or 13.

Things That Cannot Be Done During Chapter 13

Traveling If Not Able To Make Scheduled Loan Repayments

For example, if you need to make regular payments to an appointed trustee and fail to make these payments, you will not be permitted to travel. Either domestically or internationally. However, if you are able to make all of your scheduled loan repayments such as your mortgage repayments, and are still able to make any meetings that you are ordered to attend, you will be able to travel to your heart's content. As long as you can pay the full amount of your domestic or international trips.

Opting Out For Paying Child Support Payment

Even if you file for bankruptcy, there are some debts that you won't be able to avoid paying. A key example of which is child support payments. So there is no point in trying to file for bankruptcy in order to try and avoid paying your child support payments.

Stopping Any Court-mandated Alimony Payments

If you went through a divorce prior to filing for bankruptcy and were ordered to pay your ex-spouse on-going alimony payments, you will still be expected to meet these obligations on an ongoing basis. Instead, you'll still be able to pay the alimony payments which are tied to the alimony laws of the state in which you spent most of your married life.

Avoiding Disclosure Of Tax Returns

In order to be able to file for chapter 13, you will need to be willing to provide evidence that proves that you have met your personal tax obligations for the past four years. This means that you'll have to prove that you paid both your state taxes and your federal taxes for the past four years. So it's well worth looking for evidence that you've paid all of your taxes before you talk to your lawyer about evoking chapter 13. In order to expedite the process. Especially if your home is in the process of being seized by the bank and you'd like to save your home from being sold off to pay for the debts that you have accumulated.

However, if you don't have the evidence to prove that you've met your tax obligations straight away, your case can be temporarily put on hold until you are able to produce the necessary tax documents, for your case to proceed.

Planning To Pay Debts Over A Period That Exceeds Five Years

You will only be able to file for chapter 13 if you can prove that you can action a plan in order to pay back your list of major creditors, within a 3-5 year period. If you believe that it will take you a longer time period to pay off your debts, you will not be eligible to file for chapter 13. The basic premise of chapter 13, is that it may allow you to free up enough of your monthly income so that you'll be able to make regular mortgage payments, which will allow you to keep your family home. As while you won't be required to pay off all of your debt and may have much of your debt wiped, you will still be required to pay mortgage payments, if you want to keep your home.

On the bright side, many of the debts which you have acquired over the years, which have caused you to file for bankruptcy, will be wiped as a result of your bankruptcy. For example, in most cases, you should have no trouble getting all of your credit card debt wiped.

Invest Without The Court's Permission

You will need approval before you invest any leftover money which you may have. So you will no longer be able to invest in your investment portfolio, freely.

Things That Can Be Done After Filing For Chapter 13

Start A Business

The day after you file for chapter 13, you will be permitted to start a business. This is as the courts realize that you will still need to make a living in order to pay off your outstanding debt such as your mortgage repayments.

In Conclusion

If you have mounting debts that you are unable to pay and believe that filing for chapter 13 will help you clear your debts and will allow you to take control of your financial future, it's in your best interests to talk to an experienced attorney. Keep in mind that an experienced attorney will be able to tell you if you're eligible to file for chapter 13 and will help you through the process of filing for chapter 13. If you choose to proceed with the plan that your lawyer draws up for you.

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How Chapter 13 Helps Lowering Your Debts
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