What is Chapter 13 Bankruptcy and How Does it Work?
Video Transcription: Question What is Chapter 13 Bankruptcy and How Does it Work? Answer A Chapter 13 bankruptcy is a type of bankruptcy in which you make payments every month. Often times chapter 13 are filed by clients who are not eligible to file a Chapter 7 bankruptcy because they need to pay something back toward there creditors. Also by people who are facing foreclosure, who are behind on there mortgage payments, behind on there car payments and they want to take the opportunity to get current or re structure there car note in bankruptcy to more favorable terms. People who are behind on IRS taxes. One of the biggest benefits of a chapter 13 bankruptcy case for taxes is as soon as we file the case is freezes all penalties and all interest as well as certain tax years are discharged without you having to make any payments back toward them. So a chapter 13 is the most powerful consumer credit consolidation that you could ever hope for. It has the federal law behind it and it is able to get caught upon the things that you want to get caught up on and to discharge the things that you need to discharge.