Filing for bankruptcy is sometimes a necessary action to take to prevent your finances from getting too out of hand. The offices of Brent George Law can provide you with a bankruptcy lawyer to help you through this time, and an attorney can inform of what exactly bankruptcy entails. Many people assume that filing means you no longer have to pay off your debts. When you file for Chapter 13 bankruptcy, the answer is a little more complicated than that.
Who Needs to Be Paid?
At the time of your filing, you might have a bunch of creditors trying to get you to pay. It can be a bit overwhelming, especially if there is one account you are forgetting. Under Chapter 13, you will no longer have to pay multiple creditors differently. Instead, someone will be assigned to your account as a trustee. You will pay this individual a set amount every month. The trustee will then pay out your creditors accordingly. This will continue for a predetermined length of time, usually somewhere between three and five years. You must make all your payments on time in order to get your debt completely discharged by the end of it.
What Are You Paying for?
A portion of your payments will go toward priority debts. These are debts deemed too valuable to let slide, so you must pay them back 100 percent. Certain items that fall under this category include:
- Child support
- Back alimony
- Salaries owed to your employees
- Tax debts
- Penalties owed to a government organization
- Contributions to benefit plans for employees
There are also items referred to as unsecured debts. This includes thing such as credit card bills you might have fallen behind on. You will pay anywhere between zero and 100 percent of these debts over the course of the plan. Finally, there are also administrative fees you need to pay. The trustee of your account receives a commission. Additionally, there can be an attorney’s fee and filing fee you need to handle as well.
Do You Lose Property?
As long as you pay your monthly amount on time, you will not lose any of your property. The reason is that your monthly fee is based off your average income. You pay your debts from your income, so all exempt property remains yours.
If this all seems a little confusing, then you should seriously consider having a bankruptcy lawyer from Brent George Law assist you. Legal advice can really come in handy and save you a ton of hassle in the long run.