WHEN IT COMES TO CONSUMER BANKRUPTCY CHAPTER 13 IS OFTEN THE BEST CHOICE
Even though Chapter 7 bankruptcy can have many benefits for the Debtor who qualifies and has mainly unsecured debt they are seeking relief from, Chapter 13 bankruptcy has many advantages over Chapter 7. Chapter 13 has the following advantages:
- If a Debtor is behind on mortgage payments and wants to save their home from foreclosure, Chapter 7 can prevent a foreclosure, but only for a temporary time. Chapter 13 allows for the restructuring of the arrearages to be paid over time.
- An unsecured mortgage lien can be stripped off in a situation where the Debtor is underwater on their mortgage.
- Chapter 13 bankruptcy allows a Debtor to keep their options open. The Debtor can most of the time dismiss and refile, can voluntarily dismiss the Chapter 13 or can convert to a Chapter 7 bankruptcy.
- Mortgage holders are generally willing to work with a Chapter 13 Debtor related to loan modifications.
- For a short period of time a Debtor can get a vehicle back after repossession.
- If a motor vehicle was financed more than 910 days prior to a Chapter 13 bankruptcy, the creditor can be paid the value of the vehicle instead of what is owed on the vehicle. Additionally, Debtors who have a clear title to a vehicle and then borrow against that vehicle can pay the lender the value instead of what is owed.
- Debtors can avoid the Reaffirmation Agreement process in Chapter 13 and avoid the risks associated with reaffirming the contract on a vehicle.
- Debtors do not surrender non-exempt property in a Chapter 13.
- Debtors maintain control over the disposition of non-exempt assets in Chapter 13 and can benefit from creditors not filing a claim in their Chapter 13.
- Ability to deal with tax problems in Chapter 13.
- Flexibility in the payment of attorney’s fees.
This is in no way an exhaustive list of the advantages of Chapter13, but it is some of the more common advantages. Please give me a call at (800) 867-1583 if you are considering filing a Chapter 13 bankruptcy and we can talk about your specific situation.
As always, any opinions expressed on this website are just that, opinions. Your individual situation might be different than outlined above, so it is probably best that you give me a call to discuss your individual situation. I pride myself on giving you the answers to your questions that are based on your individual circumstances.