There are few things in life that can be as overwhelming and confusing as receiving a notice of foreclosure. When a person is unable to meet his or her financial obligations, it is easy to fall behind with mortgage payments, leading to calls from creditors and the threat of losing the home. Fortunately, there are options available, and one of them includes the bankruptcy option of the wage-earner plan.
The wage-earner plan is commonly known as Chapter 13 bankruptcy. This option is only available to people who have a regular income and allows for repayment of debts over three to five years. The length of the bankruptcy process is based on the individual circumstances, such as the income of the Maryland applicant. No Chapter 13 bankruptcy lasts for more than five years.
This option is appealing to many people because it allows for the retention of certain valuable assets, such as the house, and typically does not require asset liquidation to repay debts. However, not everyone is eligible for Chapter 13, and not everyone who applies is approved. Any Chapter 13 bankruptcy plan must be approved by the court and closely followed for the duration of the process.
Bankruptcy is often a viable option for people who believe that they have no way out of their current financial situation. It is important to understand the eligibility requirements and determine if the wage-earner plan is the most appropriate option. If interested, a person may seek an evaluation with an experienced Maryland bankruptcy attorney in order to make practical and smart choices.
Source: uscourts.gov, “Chapter 13 – Bankruptcy Basics”, Accessed on Aug. 14, 2016