The Benefits Of Chapter 13 Bankruptcy
We know that considering filing for bankruptcy can be a daunting proposition, but Chapter 13 bankruptcy can have many benefits for individuals. Understanding the implications and benefits of Chapter 13 bankruptcy can help you understand if this is the right step for you to take. For more information regarding Chapter 13 bankruptcy and to discuss your specific situation, contact a Chapter 13 bankruptcy lawyer today.
Structured Repayment Plan
One of the most notable benefits of Chapter 13 bankruptcy is the structured repayment plan it offers. Unlike Chapter 7, which liquidates assets to pay off debts, Chapter 13 allows you to create a manageable plan to repay your creditors over three to five years. This plan is based on your income, expenses, and the amount of debt you owe. By adhering to this plan, you can systematically reduce your debt without the immediate loss of your assets. Devising a smart and attainable payment plan with the assistance of an experienced lawyer can help you manage your debts and take back control of your financial situation.
Protection From Foreclosure
Chapter 13 bankruptcy provides a vital lifeline for homeowners facing foreclosure. Once you file for Chapter 13, an automatic stay is put in place, halting foreclosure proceedings. This stay allows you to catch up on missed mortgage payments through your repayment plan. Attorneys like our friends at Resolve Law Group can attest to the effectiveness of this provision in helping individuals keep their homes while reorganizing their debts.
Consolidation Of Debts
Filing for Chapter 13 bankruptcy can simplify your financial life by consolidating your debts into a single monthly payment. This consolidation includes various types of debt, such as credit card balances, medical bills, and personal loans. By making one payment each month to a bankruptcy trustee, who then distributes the funds to your creditors, you can avoid the stress of juggling multiple payments and due dates. This streamlined approach can make it easier to stay on top of your financial obligations.
Protection Of Co-Debtors
If you have co-signers on any of your loans, Chapter 13 bankruptcy offers a unique advantage by protecting them from creditors. When you include a co-signed debt in your repayment plan, your co-debtor is shielded from collection efforts as long as you continue to make your scheduled payments. This protection can be a significant relief, as it prevents your financial difficulties from negatively impacting your co-signers.
Potential To Lower Certain Debts
Chapter 13 bankruptcy also allows for the possibility of reducing the amount you owe on certain debts. For example, if you owe more on your car loan than the vehicle is worth, you may be able to lower the loan to the car’s current value, potentially lowering your monthly payments. Additionally, some unsecured debts may be discharged at the end of your repayment plan, meaning you won’t have to pay them in full. An experienced bankruptcy lawyer can help you understand the implications and benefits that Chapter 13 holds for your specific debt.
Receiving Professional Assistance With Chapter 13 Bankruptcy
While bankruptcy may be a daunting proposition for some, in reality, Chapter 13 bankruptcy offers a structured, protective, and potentially cost-saving approach to managing overwhelming debt. If you believe that Chapter 13 bankruptcy might be right for you, contact a lawyer today to discuss your situation.
