Chapter 13 bankruptcy is a common form of bankruptcy that will help you absolve most forms of debt and help you get back onto the right track of fiscal responsibility. However, there are undoubtedly a few questions you have about the process. Throughout this brief article, you will learn a few answers to some of the most commonly asked questions about Chapter 13 bankruptcy.
Will Chapter 13 Bankruptcy Help With Your IRS Debt?
In a word: yes. While Chapter 7 bankruptcy does not absolve or help you recover from IRS debt, you will receive a bit of help with your IRS debt if you successfully file for Chapter 13 bankruptcy. Although you will still have to pay back taxes if you file for Chapter 13 bankruptcy, you will be given the leeway to pay those taxes over the course of your Chapter 13 payment plan. This plan usually lasts anywhere from three to five years.
How Much Of Your Debt Will You Have To Repay?
You will have to pay all of the bankruptcy related fees, including the filing fees and bankruptcy attorney fees. You will have to pay for what are considered priority debts, which includes any spousal or child related fees. Priority debts also include any wages or fees that you owe your employees if you are a business owner. If you wish to keep your home or vehicle, you will also have to fully pay the debt you owe for the aforementioned. There are also numerous unsecured debts that vary between you having to fully pay off the debt to it being forgiven. Unsecured debts are assets that have a debt value that is assigned a percentage that you have to pay off entirely based upon your disposable income.
Can Income From A Retirement Plan Be Used To Fund A Chapter 13 Payment Plan?
Yes, it can. A Chapter 13 plan requires you to be able to prove to a judge that you have enough income to pay off your debt over the three to five span of years. Among the sources that you can use to fund your Chapter 13 plan is retirement plans.
Filing for bankruptcy can be a difficult process. Hopefully, you have learned a bit about the Chapter 13 process with the help of this brief guide. If you have any more thorough going questions or you are considering filing for Chapter 13 bankruptcy, it is highly recommended that you seek the services of a skilled and trusted bankruptcy attorney.