Chapter 13 bankruptcy allows you to establish a repayment plan for your debts based on your income and your needs. You have three to five years to repay the debt under a Chapter 13 bankruptcy plan. Creditors are not allowed to collect debts from you or harass you in any other way while you are going through a Chapter 13 bankruptcy.
While Chapter 13 is often a fallback choice for people who are limited from filing Chapter 7 bankruptcy, Chapter 13 has some advantages over Chapter 7 that can sometimes make it the best choice for many people for other reasons as well.
4 Reasons Why Chapter 13 Could Be The Best Alternative For You
You Get To Keep Your Property
In a Chapter 13, you can keep property that you could lose in a Chapter 7. For example, sometimes Chapter 13 is the only way to keep your home.
You Get An Automatic Stay
Chapter 13 bankruptcy, once filed, gives you an “automatic stay’’ that protects you from legal action such as automobile repossession, foreclosure and garnishment of your wages. .
You Lower Your Debt
Chapter 13 bankruptcy can lower the amount of your debt and in certain circumstances the interest rate of your debt.
Other Broader Protections
Chapter 13 bankruptcy helps business owners who need to escape their debt but want to protect their businesses. Chapter 13 also protects friends and relatives who have co-signed on your debts and would otherwise be obligated to creditors.
In addition to the above, there are a number of other times when Chapter 13 is the preferable route for a debtor. For example, because you have made an effort to repay your debts simply in a reorganized manner, sometimes lenders including but not limited to banks will treat Chapter 13 debtors better than Chapter 7 debtors.
Are You Considering Filing For Bankruptcy?
If you feel bankruptcy is the best option for your financial situation you need to speak with an experienced bankruptcy lawyer as soon as possible. Please contact us online or call our office directly at 888.348.2616 to schedule your free consultation.