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Important considerations for a Chapter 13 bankruptcy

Chapter 13 bankruptcy isn’t an easy way out of debt. Many people may falsely assume that once they file, they are done. The fact is that a Chapter 13 filing means that you are going to make regular payments to the bankruptcy trustee. This fact alone makes it a more difficult option than the Chapter 7 filing, which doesn’t require any payments be made to the trustee.

Most Chapter 13 bankruptcy plans require payments for three to five years. The issue here is that there are many variables that might come up during that time that could change your ability to make the payments to the trustee. It is possible that you might have some flexibility built into your repayment plan; however, this can often be difficult to handle ahead of time.

Make sure that you are prioritizing your payments to the trustee. If you don’t make these according to the plan, your bankruptcy can be tossed out and you won’t be able to count on the financial protection it provides. You also have to ensure that you are paying your other bills for the duration of the case.

Another consideration is that your payments may be made through a direct payroll deduction. If you change employers, you will have to update this. Alternatively, you might be able to ask to pay the court directly. Typically, this option is reserved for people who are in danger of losing their job due to the bankruptcy filing, and those who are facing other challenges related to their employer knowing about the filing. Just remember that bankruptcy filings are public records, so your boss might already be aware of the filing.

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