The ins and outs of a typical debt repayment plan
If you’ve built up debt during your lifetime, you know how difficult it can be to work your way out of it no matter how hard you try. Many people in debt find themselves filing for bankruptcy. This is not the end of the road for your life, so don’t worry that it is. When you file for bankruptcy, you will create a repayment plan. Here’s some information about that plan.
As you work to create a repayment plan with your creditors, the first thing you will need to do is establish the amount. This can be a very difficult part of the plan because the creditor will want to get as much money back in as little time as possible and debtors will want to complete the plan as quickly as possible. Both of these scenarios are bad for the debtor because they could lead the debtor to agreeing to a plan he or she cannot afford.
The next step in creating a payment plan is the amount of time the payment plan will be active. Debtors should never extend the plan’s length of time further than they need to repay the debt, but at the same time, they should not struggle with making the payments. Small debt should be repaid between six and 12 months.
Now you can determine how the payments will be made to the creditor in the repayment plan. There are usually just two options: via a debit card or direct withdrawal from a checking or savings account.
Are you headed for bankruptcy in Long Island? An experienced bankruptcy law attorney will be able to answer all of your questions, understand your rights, explain the process and guide you in the right direction from start to finish.