In situations where you cannot regain financial traction amid mounting bills and other debts, filing for bankruptcy may be your only option. If you qualify for Chapter 13 bankruptcy, you will pay off some of your debt through a repayment plan, allowing a judge to discharge the remaining amount.
Once a bankruptcy court approves your plan, you will supply payments to your bankruptcy trustee, who will distribute your money to your creditors. Keeping your repayment plan on track will help you complete your bankruptcy.
Establish a payment method
You must make your payments to your trustee on time. While you might feel comfortable delivering your amounts to your trustee in person, you should factor in unforeseen situations that could delay a meeting, such as an illness or an accident that inflicts serious injuries. Some people also have crowded schedules and might have difficulty providing payments in person.
Fortunately, it is possible to secure a payroll deduction. This allows your trustee to acquire your money directly from your paycheck. Having this mechanism in place takes the pressure off you to give your payments to your trustee yourself.
Refrain from acquiring new debt
The idea behind a repayment plan is to pay as much of your debt as possible while also holding on to your property. Problems can arise if you take out any new debt. In bankruptcy, debtors should consult a trustee before obtaining additional debt. The trustee may determine that more debt will endanger your ability to fulfill your plan.
Create a budget
With a budget in place, you can live within strict means while you make payments. This is not just to complete the plan, though. Bankruptcy does not release you from certain obligations such as child support or alimony, and missing such payments can endanger your bankruptcy. So even as you budget so you can make Chapter 13 payments, you must also plan for other financial requirements.
Bankruptcy should help you regain your financial health. Knowing how to navigate the process can help boost your odds of success.