A Chapter 13 bankruptcy is also known as a reorganization bankruptcy, and it allows individuals to consolidate their debts into one monthly payment over a 3-5 year period, while generally paying less than 100% of unsecured debts. It can also lower interest rates on some secured debts, like car loans. Because you are continuing to pay your secured debts, you will likely be able to keep all of your property.
Why File Chapter 13?
Chapter 13 is ideal for catching up on the missed mortgage, auto, and outstanding tax payments. Because you will be catching up on missed payments, Chapter 13 bankruptcies generally prevent foreclosures and repossessions. For those who owe more on their first mortgage than the property is worth, a Chapter 13 allows you to remove any junior mortgage or equity line secured against your real estate.
Depending on your income, expenses, and assets, you will only pay back a portion of your unsecured debts such as credit cards, personal loans, medical bills, and repossession/ foreclosure deficiencies. The attorneys at Younger & Hennecke will work with you to propose an affordable repayment plan.
At Younger & Hennecke, we pride ourselves on the fact that the attorney you hire will see your case through to completion. Our attorneys handle all paperwork personally instead of relying on paralegals, forms, and applications filled out by clients. We will guide you through each stage of the bankruptcy process and ultimately put you on a path towards rebuilding your credit.
Some of the benefits of Chapter 13 bankruptcy include:
- Eliminating a second or third mortgage on your home
- Lowering payments on car loans
- Preventing foreclosures by allowing the borrower to catch up on missed payments over a 3-5 year period without incurring additional interest or penalties
- Stopping the accrual of interest on tax debts
- Protecting cosigners who are not filing bankruptcy
- Keeping property that might be subject to liquidation in Chapter 7
- Allowing you to continue operating your small business
Why You File for Chapter 13 Bankruptcy
If you are in a tremendous amount of debt and are considering filing bankruptcy, then you should consider your options first. For example, if you have an asset that is very valuable like a home, then you might be able to hold onto it by filing chapter 13. There is a lot of Chapter 13 Bankruptcy Information that you will need to look into to see if it is an appropriate option for you, but generally, for those that are still making money and can repay their debt in a three to five year period of time, it is viable.
A court will need to approve the plan to repay creditors in an extended time frame. After looking at the Chapter 13 Bankruptcy Information, you will see what makes it different from chapter 7. In chapter 7, the person with the debt receives a discharge of those debts immediately. This is not the case with chapter 13, as you still need to complete the negotiated payments in the allotted amount of time. During that repayment period though, you will be protected from things like garnishments and lawsuits from the creditors. Another benefit of chapter 13 is the fact that it usually covers more debts than chapter 7. Learn more at http://bnkut.com
What Do You Should Do
You should try to file for chapter 13 if you have a home because you will be able to avoid being foreclosed on. This is not possible with chapter 7. You essentially are given a second chance to undo your failure to make payments in the past. Obviously, this is only possible if you currently have a job and are making money. If you do not have a job, then chapter 13 is not the proper option. Another thing that Chapter 13 Bankruptcy Information will explain is the fact that cosigners can be protected during the extended payment period.
So if you are in danger of losing your home but still have a job, consider studying Chapter 13 Bankruptcy Information so the courts will approve it. When you have your new repayment plan though, you need to be very diligent in paying back your debts.