Bankruptcy, while something generally to be avoided at all costs, is sometimes the necessity upon which we must fall back. If you find yourself in danger financially and are considering filing Chapter 13 bankruptcy, it is important to be aware of exactly how it will affect you, your credit, and your future. The laws governing claims function at the Federal level, and thus claiming a Sacramento bankruptcy is essentially the same as a Philadelphia bankruptcy; the only differences being the occasional exemption specific to a given state. For the vast majority, however, the process and what it entails remains uniform throughout the nation.
Chapter 13 is what is referred to as the “wage-earner’s bankruptcy.” It can be claimed by a person who is unable to keep up with their debts, yet still earns a decent salary. Decent, in the eyes of the court, is determined by the income of those living in a given area; for Sacramento, this is somewhere in the range of $50,000 a year for a given family. If you fall under this category, then you are eligible for Chapter 13 which will grant you a reprieve from any debtor or collector’s agencies. A repayment plan which will likely last several years or more will be put into effect, based upon a ratio of how much you owe and how much money you earn.
While this may sound like a simple refinancing that has a tremendously negative impact on your credit, the filing creates for a debtor what they need most: breathing room. While under the effects of Chapter 13, all attempts at debt collection and repossession must cease and desist, and other practices such as the garnering of wages cannot be inflicted upon the person in question. Essentially, you get a chance to pace your debts and get back on track at the cost of your credit, which will remain negatively effected for two years or more.
If you happen to live in the Sacramento Ca area and need help answering any bankruptcy questions you may have, conduct a search online for a bankruptcy attorney in Sacramento today!