Watch out for the “Chapter 13 Trap!
Watch out for the
dreaded chapter 13 trap! You apply for a chapter 7 bankruptcy in the hopes of wiping the
slate clean. The judge reviews your paperwork. But you don't get the
Chapter 7 bankruptcy deal - instead you get screwed! The court finds that you have enough
income to pay off half your debts within a five year window and so orders you into a
chapter 13 extended repayment plan!
Exactly how and why the judge makes this determination is still a bit of a mystery.
What’s the bottom line? When you fully expected to wipe out all your debts and get a clean start at life, you end up locked into a five year long repayment plan that leaves you living as poor as a church mouse for five long, long years!
Who said slavery is dead?
If you decide to file for chapter 7, be very sure that your attorney is entirely confident
that the court will not deny your request chapter 7 deal and instead order you into
chapter 13. Grill your lawyer on this. Demand that he explain why you don’t have to
worry.
Ask him what steps you can take to further reduce your chances of ending up with a chapter
13 plan. How can you change your financial affairs so as to maximize your chances of
qualifying for a chapter 7 deal that will wipe out all your debts?
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