Chapter 13 bankruptcy enables debtors with regular income to discharge most debts without liquidating any personal property. This can be ideal for debtors who have significant equity in real estate or other property.
THE REPAYMENT PLAN
Chapter 13 bankruptcy consolidates debt into a 3-5 year repayment plan. Though you may ask how this is different than debt consolidation, the difference is that at the end of the Chapter 13 plan, the remaining debt is discharged.
ADVANTAGES OF CHAPTER 13
Chapter 13 offers certain advantages over Chapter 7. One of the biggest benefits of Chapter 13 is that it can enable a debtor to cure delinquent mortgage payments over time through the plan. Because it allows debtors to reschedule secured debts, it also usually reduces the debtor’s overall monthly payments. Debtors also may be able to pay a significant portion of their bankruptcy attorney’s fee through the plan, minimizing their upfront costs. Finally, a Chapter 13 bankruptcy is reflected in your credit report for seven years, while a Chapter 7 remains for ten years.
Statistically, the vast majority of Chapter 13 bankruptcies filed without an attorney fail. Contact our attorneys for a free consultation to make sure that doesn’t happen to you.