Kentucky residents like you may run into financial troubles without expecting it. In some instances, the best way to solve these troubles is through bankruptcy. Filing for bankruptcy is not the end of the world. But you must have full understanding of what you are getting into.
For example, if you file for Chapter 13 bankruptcy, you have obligations to fulfill. What are these obligations? How do they impact you?
Primary obligations as a debtor
The U.S. Courts discuss everything you need to know about Chapter 13 bankruptcy. As someone filing for Chapter 13 bankruptcy, you are the debtor. As the debtor, you have certain obligations. For example, you must file all necessary documents and forms. Without doing this, you cannot proceed with the filing. Included in this are the various fees for filing bankruptcy.
Repay your creditors in order
Your number one obligation is to repay your creditors. After all, Chapter 13 bankruptcy centers around a repayment plan. You should pay off your creditors in a certain order, too. For example, you must pay priority debts in full first. This includes alimony or owed wages. Unsecured creditors get paid back last. In general, your plan must pay off every creditor in a period of 3 to 5 years.
Your final obligation is to stick to the plan you set. There is no backup plan for Chapter 13 bankruptcy. You work with agents to craft a plan that you can realistically stick to. It is then up to you to stick with it. You cannot file for a separate type of bankruptcy if you fail to repay your creditors.