Most people come in to our office wanting to do a Chapter 7. They think it’s the best thing possible because it lets them cancel all their debts. While for some people, that’s a good thing, for others it can cause a lot of problems. I happen to think that Chapter 13 bankruptcies allow for the most flexibility which is why I believe that should a 13 be a good option for someone, they should definitely pursue it. Below, I lay out a list of reasons why I believe a Chapter 13 is a great option for certain people.
Chapter 13 cases are great because:
- The amount of money you repay to your creditors can be as little as 0%. While that sounds too good to be true, it is, depending on your individual situation of course.
- You keep your stuff, unless you don’t want to. You keep your house, your business, your car, etc. No one is snooping around trying to find things to sell.
- You can amend a Chapter 13 during the case. If your income goes down, you lose a job, or you just go out on maternity leave, the plan can be amended to accommodate those life changes.
- You can dismiss your case if you want. You can literally just walk away. While that isn’t necessarily a good idea, you can do it, unlike in a Chapter 7 plan.
- The automatic stay protects you for the entirety of your case. You can’t be a victim of foreclosure or repossession if you abide by the plan.
- If you’re behind on your mortgage, the amount you’re behind can be included in the plan and caught up over the course of the plan.
- If you have a really big interest rate on your car, the amount of the interest rate can be reduced to a lower rate.
- The IRS HAS to abide by the plan and let’s be honest, no one likes the IRS.
- Your attorney’s fees are included in the plan. You don’t have to come up with the money to pay your lawyer up front.
Other advantages to Chapter 13s
If you do have to file a Chapter 13 case, you’re eligible for another Chapter 13 (should you need one) a whole lot sooner than you can if you had filed a Chapter 7. In fact, its ok to file a second Chapter 13 two years from the filing of your first case.
Generally speaking, a Chapter 13 is off your credit a whole lot sooner than a Chapter 7. Usually, a 13 is gone two years after you complete a 5 year plan.
Unlike working with a debt settlement agent, your Chapter 13 Bankruptcy is enforced by the full weight of the federal court system. ALL your creditors must abide by it or the face severe penalties. NO creditor can opt out and at the end of the Chapter 13 Plan, the debt you owe them is gone, one way or another.
In the end, a Chapter 13 case is a great way to get back on your feet after a period of financial difficulty. Our attorneys have filed THOUSANDS of Chapter 13s and we have decades of experience successfully shepherding cases through the court. Contact our office today for a free, no obligation consultation to find out of you qualify for a Chapter 13 case.