If you’re finding your way through a Chapter 13 bankruptcy, you are required to send regular monthly payments to the bankruptcy trustee who will deliver your money towards your loan companies as outlined by a repayment schedule agreed upon with the bankruptcy court. In most cases, one would decide on a Chapter 13 in an attempt to save a home from foreclosure, to try and keep a vehicle from being repossessed or simply because they own properties and assets that go above and beyond the authorized exemptions they want to save. Still, if a situation comes up that makes it difficult to send in your Chapter 13 obligations, what can you do?
You could switch the filing to a Chapter 7 (liquidation) whenever you feel is necessary. You will very likely still get to dismiss a significant part of your debts even though a person is not in the position to settle your payments as agreed upon in your payment schedule. By simply moving to a Chapter 7, however, you’ll be altering the way in which your bankruptcy operates.
One perk of transitioning to a Chapter 7 is that you could possibly get rid of your unguaranteed obligations which include cards and some medical bills. When you are paying off a vehicle on your own, you may still be able to make installments on the vehicle, though this could call for a reaffirmation agreement. So long as you are on top of any house obligations, switching over to Chapter 7 will continue to work as you can continue to send your repayments to the mortgage company.
Another possible advantage of moving onto a liquidation bankruptcy is connected to debts arising once the bankruptcy has started off. For instance, if you you owe for a recent health-related emergency or medical center term, you won’t be able to discharge the balance due in your current Chapter 13 bankruptcy except for when the hospital defers the amount due to your bankruptcy case. You’re going to be in a position to have it added onto your Chapter 7 since the debt is deemed to have occured ahead of your obtaining consumer bankruptcy coverage.
There will still be disadvantages to deciding on a Chapter 7. Should you have non-exempt resources, the Chapter 7 trustee may want to distribute those possessions. In the event you were working to save your home through a Chapter 13 case and it is impossible to stay on top of the installments, the mortgage lender may determine whether or not the court allows them to foreclose, or hold off until your bankruptcy is over. It would be wise to talk with a bankruptcy law firm.
Many aspects of bankruptcy can prove to be confusing. If you need help switching from a Chapter 13 to Chapter 7, talk to an experienced Oklahoma bankruptcy attorney. A skilled Tulsa bankruptcy lawyercan assist you with every step of the bankruptcy process and answer any questions you may have before, during and after filing.