Dealing with overwhelming debt is both bad for your credit score and for your health. Overwhelming debt can lead to a ton of stress, which can wreak havoc with your body. One option those suffering under a mound of debt have is to use a wage-earner plan in Chapter 13 in Long Island.
A wage-earner plan is just what it sounds like; it's a plan for people who have a regular income to use in an effort to pay down their debt under Chapter 13 bankruptcy. The plan lets people pay their debt either in whole or in part over the span of three to five years.
When the payment period is active, the law protects debtors from the actions of creditors. This means that creditors are not permitted to continue their debt collection practices, no matter how little or innocent they might be. The length of the repayment plan depends on the monthly income of the debtor and the state median that can be applied to the case.
A wage-earner plan can be used by any person who is employed, self-employed or who owns a business that is unincorporated. Previously, this plan was only available for people who earned a regular income.
A wage-earner plan, under Chapter 13, helps debtors to save their home from foreclosure, which is not an available option when filing Chapter 7 bankruptcy. Secured debts can also be rescheduled using Chapter 13 and a wage-earner plan.
Are you headed for bankruptcy in New York? An experienced bankruptcy law attorney can help you determine the best course of action for your situation, including offering an explanation about wage-earner plans.
Source: Investopedia, "Wage Earner Plan (Chapter 13 Bankruptcy)," accessed Aug. 09, 2017