Reasons for Filing Chapter 13 Bankruptcy
Chapter 13 bankruptcy helps reorganize debt obligations by creating a repayment plan that is completed within 3 to 5 years. The debtor makes payments on the plan based on their eligibility and income. Sometimes Chapter 7 bankruptcy is sought first by the debtor, only to find out they qualify for Chapter 13. While Chapter 7 is known for giving consumers a fresh start, Chapter 13 can help you gain control of your finances and help you keep your assets.
Many consumers often don't see Chapter 13 as a way to help manage their debt but there are several reasons why it's become a viable solution in dealing with personal finances:
- You want the protection of bankruptcy while having the desire to pay off your debt.
- After paying your living expenses, you have enough disposable income to place toward outstanding debt.
- Chapter 7 bankruptcy was filed within the last 8 years with qualifying debt discharged.
- You've fallen behind on your mortgage payments but want to keep your home.
- You've fallen behind on your car payments but are willing to make payments to reinstate the loan allowing you to keep your vehicle.
- You may have assets that qualify for protection under Chapter 13 instead of Chapter 7.
- You need legal assistance in repaying outstanding debt now but want to leave open the possibility of filing Chapter 7 in future time.
- You have debt obligations that are ineligible for discharge under Chapter 7.
Reviewing your situation with an experienced bankruptcy attorney can help you determine if bankruptcy is the right solution for you.