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How can Chapter 13 bankruptcy help me become debt-free?

Freedom from debt is the goal for a lot of people. Debt can be overwhelming and can actually stop people from living the lives that they want to live. That may sound a bit dramatic, but it's true especially if the debt reaches an unmanageable point. Serious financial debt can lead to homes being foreclosed and vehicles being repossessed. No one wants to be in a situation where they can't pay their bills. Finding a way to contain one's debt and keeping it from spiraling out of control is the goal that individuals with severe debt want to reach.

Chapter 13 is one way to corral seemingly impossible financial burdens. A Chapter 13 bankruptcy filing allows relief of your debt while providing a financial reorganization plan. This plan will take into account the secured and unsecured debts that need to be addressed. A trustee is appointed to oversee the process and to ensure that it is in line with applicable court rules and regulations regarding bankruptcy. A Chapter 13 filing will stay on one's record for a period of time and may affect one's credit rating. However, this may be worth it if it means financial freedom.

Although there is a trustee that ensures that the process is followed, the court is the ultimate overseer. In order to even begin the whole bankruptcy process, there has to be an application filed with the court. This application has to include a number of things, such as schedules of expenditures, assets and liabilities, and a statement of current financial outlook, to name a few. This information aids the process.

A Chapter 13 bankruptcy filing can lead to financial freedom because it permits you to reorganize your debt in a helpful and positive way.

Source: United States Courts, "Chapter 13 - How Chapter 13 Works," accessed on Jan. 29, 2015

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