WHAT IS CHAPTER 13 BANKRUPTCY?

Chapter 13 Bankruptcy is also known as a reorganization bankruptcy. Chapter 13 bankruptcy is filed by individuals who want to pay off their debts over a period of three to five years. This type of bankruptcy appeals to individuals who have non-exempt property that they want to keep. It is also only an option for individuals who have predictable income and whose income is sufficient to pay their reasonable expenses with some amount left over to pay off their debts.

ADVANTAGES OF FILING CHAPTER 13

Chapter 13 bankruptcy allows you to reorganize your finances by consolidating your debts into one monthly payment. Chapter 13, however, should not be confused with traditional debt consolidation programs Chapter 13 has the power of the Federal Bankruptcy Code behind it, and provides many advantages for people seeking debt relief:

The Bankruptcy Automatic Stay – Stop Foreclosure
When you file Chapter 13 bankruptcy, you receive immediate protection by an automatic stay, a Bankruptcy Court injunction that prevents almost all collection activity against you. The stay has the power to stop foreclosure, repossessions, garnishments, license suspensions, and creditor harassment.

Chapter 13 Drastically Reduces Total Amount of Debt
Subject to qualifications, A Chapter 13 bankruptcy will allow you to pay as little as 10% of the unsecured debt back and eliminate the other 90%. Your reduction in principal owed allows you to pay your debts off more quickly that you could through other consolidation plans that lack the power to dictate what the creditors are entitled to be paid. Upon filing Chapter 13, any debt in existence prior to the filing does not accrue any more late fees, and usually will be repaid interest-free. All of the money you pay toward your unsecured debt will be applied toward principal drastically reducing the amount of time it takes you to repay a debt.

Bankruptcy Attorney Working for Your Best Interests
A Chapter 13 bankruptcy attorney has a legal and ethical obligation to zealously represent your best interests. Your attorney’s compliance with his obligations to you are regulated by state law. Thus, when filing Chapter 13 bankruptcy, you have the opportunity to have a bankruptcy attorney represent only your interests and you are ensured that your attorney is fighting for your rights.

Priority Debts Are Paid First in Chapter 13
A Chapter 13 bankruptcy plan pays off most secured loans first and delays payment of unsecured debts. The majority of the initial Chapter 13 payments can be applied towards mortgage and automobile payment defaults. Credit cards and medical bills can be paid after these secured and other priority claims have been paid off.

FREE NO OBLIGATION BANKRUPTCY CASE EVALUATION FORM

Fill out this form if would like to request a Free No Obligation Bankruptcy Case Evaluation right now.

Filing for bankruptcy may be the most responsible way to remove the pressure from financial debt without losing everything. Many businesses need to file for bankruptcy at some point, although this is never something that is desired. Speaking with a bankruptcy attorney when deciding about filing bankruptcy, can ensure that you’re taking the best route possible. If you’re facing foreclosure or just can’t meet your monthly bills, bankruptcy might be your solution. Filing Chapter 13 bankruptcy may stop foreclosure and allow you to negotiate a payment plan with the lender. Chapter 13 allows you to pay off your debt with a three-day five year payment plan and at the end the left over unsecured debt will be wiped out.