Chapter 13 bankruptcy is often preferable to a Chapter 7 bankruptcy because it helps you keep your property if you are behind on your mortgage or business payments. It is a repayment plan that allows you to make payments toward your debts at a significantly reduced cost. You can pay the debts off at a reduced interest rate over a period set by the court. Chapter 13 can be enabled to prevent a house foreclosure, make up for missed car or mortgage payments, pay back taxes, and stop interest from accruing on your tax debt.
Through a Chapter 13 bankruptcy, you may be able to keep your valuable non-exempt possessions. Our attorneys can negotiate a reasonable repayment plan based on your disposable income so that you can make feasible monthly payments without worrying about necessities. By sticking to the terms of the repayment plan, all your remaining dischargeable debt will be forgiven when the period ends. This means that you will no longer be legally liable to pay back your old debts.
Chapter 13 is generally filed by debtors who wish to keep secured assets, such as a home or car, or who make too much to qualify for a Chapter 7 bankruptcy. To file for Chapter 13, you must have a source of disposable income to apply toward the repayment plan. Chapter 13 reorganizes debt while Chapter 7 is a full liquidation.