Understanding How a Chapter 13 in St. Louis Works

Not everyone can qualify for Chapter 7 bankruptcy protection. For those who need some sort of support in order to regain control of their finances, considering the possibilities of a Chapter 13 St. Louis makes sense. Here are some of the benefits of how this type of bankruptcy can make a difference.

Protection from Creditors

As with a Chapter 7 bankruptcy action, the Chapter 13 St. Louis puts an immediate stop to any attempts by creditors to collect outstanding debts. That means no more phone calls at work or at home, no more threatening letters sent through the mail, and no more attempts to file some sort of suit in order to collect on those debts. From the moment the petition for the Chapter 13 is filed, all communications must be directed to the lawyer and to the court.

Equitable Payment Plan

With a Chapter 13 St. Louis, the court is essentially agreeing to function as the means whereby funds are collected and distributed to the creditors. In order to make this happen, the court will develop a payment plan that will allow the debtor to still have enough money to take care of basic living needs like food, clothing, and shelter. Funds above and beyond those needed to maintain a reasonable quality of life are forwarded to the court and allocated to creditors according to a specific plan adopted by that court. The collection and distribution of the funds continues until the balances owed to the creditors are paid in full.

Garnishing Wages

One of the points debtors must recognize is the court will garnish wages in order to ensure the funds are forwarded every pay period. This means the employer will be served with a court order to withhold those funds. Once the bankruptcy is settled in full, the court will issue another order that authorizes the employer to cease the withholding. When no other solution is workable, it does pay to talk with an attorney about the possibility of filing for bankruptcy. For anyone who believes that they need this type of court protection, schedule an appointment with the Law Offices of Steven K. Brown and find out more about both types of personal bankruptcy. Doing so could be the first step in recovering financial freedom.