Many people struggle with the decision between Chapter 7 and 13 bankruptcy.  If you feel that you can repay some of your debt by having the payments restructured to meet your payment abilities, then Chapter 13 is the choice for you.  There are many different benefits to this form of bankruptcy including the following seven key points.

  1. If you have fallen behind on your mortgage payments, but want to keep your home, Chapter 13 bankruptcy will allow you to catch up and bypass foreclosure.
  2. Chapter 13 bankruptcy also has different property exemption regulations than Chapter 7 bankruptcy.  This means that you may be able to keep certain non-exempt property.
  3. Depending on how important your car is to your lifestyle and job, you may find the need to keep it during bankruptcy proceedings.  Chapter 13 allows you to catch up on overdue car payments and loan payments.  Depending on your specific case, you may even be able to have the monthly payments reduced and have the car’s principal value reduced based on how long you have owned it.
  4. Many people jump the gun when filing for bankruptcy and go straight for Chapter 7, but if you have filed for it within the last 8 years, you may also be privy to some of the protective aspects of a Chapter 13 bankruptcy.  Consulting with a qualified bankruptcy attorney can help to shed more light on the specifics based on your case.
  5. One large problem that people face when filing is that their back taxes that are ineligible for discharge.  By consulting with a bankruptcy attorney, you may be able to have the Internal Revenue Service’s (IRS) collection calls stopped.   You will be offered a more flexible and suitable repayment plan for the ineligible taxes when your Chapter 13 bankruptcy case is brought to court.
  6. You can have a custom tailored repayment plan created to suit your budget and outstanding debts, including student loans, car payments, mortgages, etc.
  7. If you had cosigners for your loans, they may be pursued in the case of a Chapter 7 bankruptcy filing, however, Chapter 13 will protect all parties from creditor harassment.

By learning more about the benefits of Chapter 13, you can determine if it is the right choice for you.