When most debtors think of bankruptcy, they think of Chapter 7 bankruptcy where they can discharge their debts in a few months and get their fresh financial start immediately. Many above-median income debtors are disappointed when they find out that they only qualify for a Chapter 13 bankruptcy . But their disappointment is unwarranted.
How a Chapter 13 Bankruptcy Can Help You
Below are several reasons why Chapter 13 bankruptcy can really help you:
- Chapter 13 bankruptcy will allow you to keep non-exempt property as long as you make payments as prescribed in your Chapter 13 bankruptcy plan. For example, if you had a vehicle which was delinquent in payments by 3 months, you would be able to keep that vehicle as long as you made payments to cure the delinquency over their life of the bankruptcy plan. Another important example is a home you want to keep in bankruptcy. If you’re behind on mortgage payments you can catch up on your payments over a 3 to 5 year time period in Chapter 13 bankruptcy.
- Chapter 13 bankruptcy has the same automatic stay powers as Chapter 7 bankruptcy. That means that when you file Chapter 13 bankruptcy creditors must stop pursuing you for payment immediately. They can’t file a lawsuit, garnish your wages or enforce a lien after you file bankruptcy.
- Chapter 13 bankruptcy forces your creditors to the negotiating table. If you’re like most debtors you probably tried “settling” your debts with your creditors on your own or with a debt settlement company. If so, then you know how stubborn some creditors can be, that is until they are faced with a notice that you have filed bankruptcy. Once the bankruptcy court approves your Chapter 13 bankruptcy repayment plan, the creditors must abide by it unless they have a compelling reason why they should be exempt. For example, if you committed fraud in accruing the debt, then the bankruptcy court may allow the creditor to repossess your property even though you’re in bankruptcy.
Thinking About Filing a Chapter 13 Bankruptcy? Let us Know
If you are considering to file a chapter 13 bankruptcy but you aren’t sure if it is right for you call us or fill out our contact form to set up a free consultation.