Unemployment, underemployment, rising consumer prices, increasing interest rates, and outsourcing have all contributed to people earning less money, making it difficult for them to repay what they owe. This can result in adverse credit histories, foreclosures, repossessions, and destroyed personal relationships. When you find yourself in debt, you can prevent these situations from occurring by finding relief from debt. Learn about Chapter 13 in Dayton OH, to see if this legal status is for you.

Chapter 13 in Dayton OH, is part of the United States Bankruptcy Code under Title 11. This type of bankruptcy allows a person to reorganize his debts with a repayment plan approved by the bankruptcy court. It’s created for people with a regular monthly income. A bankruptcy applicant’s time frame for payment back debts depends on whether his income falls above or below the state’s designated median household income. Five years is the maximum time allowed for any type of repayment plan.

There are many advantages of filing for Chapter 13. This legal status can help a person prevent foreclosure on his home. A person may be able to pay delinquent mortgage payments over the course of the repayment plan. Certain secured debts may be reduced. These secured debts can also be paid back over the course of the repayment plan. A debtor does not have to correspond with creditors. Instead, the bankruptcy court appoints a trustee who will accept a monthly payment from the debtor and distribute this payment to various creditors.

Part of continued eligibility for Chapter 13 bankruptcy is sticking to a plan confirmed by the court. A debtor will pay the trustee either directly or have money taken out as a payroll deduction. A person will have to learn to live on a fixed income over the life of the repayment plan. During bankruptcy, a debtor can’t create new debt without getting permission from the bankruptcy court, but when a debtor does not follow a repayment plan, the court can convert the case to a liquidation bankruptcy or dismiss the bankruptcy filing.

Filing for chapter 13 bankruptcy allows a person to reorganize debt. Using a repayment plan approved by a bankruptcy court, a person can pay off debts within three to five years, depending on his income. As long as a person makes timely payments and does not default on the provisions of the approved plan, he can find financial relief and get a new start in life.