A Bankruptcy Alternative
What is Chapter 128?
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How Chapter 128 Works
With the help of a trustee, the debtor makes a repayment plan by totaling the debts plus the trustee’s fees and dividing by 36 to get a monthly repayment amount. The debtor submits the petition, affidavit and repayment plan to the court in the county in which he or she lives and the court will issue a protective order preventing interest from accruing on the debts, wage garnishment or asset attachments by creditors and utility shut-offs.
The debtor authorizes a wage order for regular monthly payments to the trustee. If a debtor fails to complete the repayment plan, he or she is liable for the interest that accrued during the time the plan was in effect and creditors are free to recommence collection actions.
How Chapter 128 Differs From Bankruptcy
While the process for filing Chapter 128 is far simpler than filing bankruptcy, Chapter 128 does not offer all of the benefits of bankruptcy. Chapter 128 plans cannot reduce or eliminate debt in the same way that a debt discharge under bankruptcy can. People using Chapter 13 bankruptcy may end up paying only a fraction of what they owe and those filing Chapter 7 may pay nothing on certain debts. Those using Chapter 128 are still responsible for the full amount they owe.
Trying to decide between filing bankruptcy or a bankruptcy alternative such as Chapter 128 can be confusing. If you are considering filing bankruptcy, talk with a lawyer to see if that is the right option for you or if a bankruptcy alternative may be more appropriate for your situation.
Contact Burleson Legal Group Today
The first step toward your financial fresh start is to call or e-mail us today. You will speak with a down-to-earth and experienced debt relief attorney who will lay out your options in an easy-to-understand manner. The consultation itself doesn’t take long and it is free. We look forward to hearing from you today!