Chapter 13 bankruptcy is a payment plan, where you, the debtor, pay back a percentage of the debt you owe to your creditors over a period of 3-5 years. Chapter 13 can provide some very important added benefits that are not available in chapter 7. An experienced bankruptcy attorney can help you determine whether Chapter 13 is right for you.
Here are some common reasons why chapter 13 might be your most beneficial option:
- Chapter 13 can help save your home. In many instances, second mortgages can be stripped or eliminated through a chapter 13 bankruptcy. This can enable families to stay in their homes by only having to make payments on the first mortgage. Also, you have up to five years to catch up on any arrears, or missed payments, to get your mortgage current.
- If you are repaying a car or truck loan, the interest rate may be lowered in a chapter 13. Also, in some instances, the amount to be repaid on the loan can be lowered to the current market value of the vehicle.
- Chapter 13 may allow you to keep valuable assets that might be lost in a chapter 7.
- Some types of debts that are not eliminated in chapter 7 can be discharged in chapter 13.
- If you are having trouble repaying tax debt, chapter 13 can sometimes offer relief. Payments may be lowered, and penalties and interest can be reduced or eliminated.
If you are interested in learning more about whether Chapter 13 might be a good option for you, contact a bankruptcy attorney today.