If you compare Chapter 13 bankruptcy to Chapter 7, you might instantly feel like Chapter 7 is the better option. While this is true in some situations, it's not a universal truth. Chapter 13 can help people in ways Chapter 7 can't. Thus, you might turn to Chapter 13 for help if you're struggling with debts and financial issues. But first, you might want to learn the benefits it offers. Here is a list of some of the top benefits of Chapter 13 bankruptcy.
It includes an automatic stay
You probably don't know what an automatic stay is unless you've used bankruptcy before, but it's a vital part of a bankruptcy case. This stay orders every creditor to stop collecting money from you or pursuing you for the money you owe. In other words, it silences your creditors. As a result, you won't have to deal with annoying and frustrating demands from your creditors once the court orders the stay.
You won't lose your assets
The next benefit of Chapter 13 is you won't lose your assets, which is a risk you face with Chapter 7. Chapter 7 trades debt forgiveness with your assets, while Chapter 13 requires repaying your debts and allowing you to keep your assets. Therefore, there is no trade-off.
It even stops foreclosures and repossessions
As a result, you won't lose any assets, including your house and cars. This is because the automatic stay stops foreclosures and repossessions. You get to keep your house and cars if you can follow your repayment plan.
It gives you time to pay your debts
Next, you get time to repay your debts. You won't have to come up with all the money now. Instead, you get up to five years to repay them, which is plenty of time to catch up.
It might eliminate some debts
Finally, there is a chance you will receive debt forgiveness through Chapter 13. However, this isn't a guarantee. It depends on your situation, but an example of this is the money you owe for your house. The court might forgive a second loan you have on your home if you owe more than it's worth.
Choose Chapter 13 for these benefits
Chapter 13 is the right choice for some people who need financial relief. If you have questions about it or need advice for your situation, contact a bankruptcy lawyer in your area — such as Ricardo B. Casas. You won't be obligated to file for bankruptcy, but you'll receive the information you need to decide how to proceed.
