The main component of a Chapter 13 Bankruptcy is that it forms a scheme for the individual to be able to feasibly repay all or part of his or her debts. It is ideal for those with a regular income, and is a way for an individual to avoid liquidating all of his or her assets.
The repayment plan is usually set to three years if the debtor's current monthly income is less than the median average for the state. If it is more than the state median, the plan is usually for five years. A five-year plan is the absolute maximum that a repayment plan under Chapter 13 bankruptcy can be.
The following blog outlines the main benefits of filing for bankruptcy under Chapter 13, to help you consider if it is the right choice for you.
Avoiding liquidation of assets
Chapter 13 bankruptcy is perfect for those who seek to avoid the foreclosure of their homes. They can pay past missed mortgage repayments under the payment plan; however, they must also pay all upcoming mortgage repayments on time.
Lessen the impact of bad credit
Bankruptcy is never good for credit reports; however, filing bankruptcy under Chapter 13 will mean that it will only show for seven years as opposed to Chapter 7 bankruptcy, which is shown for 10 years.
It is important to fully consider all bankruptcy options before you file. Filing for bankruptcy can be a daunting process, but by seeking trusted and reliable legal guidance, you will receive tailored advice that can help you make an informed decision.
Source: Findlaw, "Benefits of Chapter 13," accessed July 21, 2017