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The benefits of filing for Chapter 13 bankruptcy

On Behalf of | Dec 18, 2015 | Chapter 13 Bankruptcy, Firm News

Due to the addition of the means test to the U.S. Bankruptcy Code, many Florida residents do not qualify to file for Chapter 7 bankruptcy. Those people often qualify for Chapter 13 bankruptcy, and they might not be aware of its advantages. Below is a discussion of many of the benefits of filing under this chapter.

One of the biggest advantages of Chapter 13 is that homeowners get the chance to keep their homes. Like Chapter 7, once filed, a stay of execution goes into effect, which means that all collection efforts must cease, including home foreclosure. In most cases, you will be given time to get current on your mortgage loan.

Wage garnishments also stop, along with repossessions. In addition, some taxes can be discharged under Chapter 13 that would not otherwise be eligible for discharge in a Chapter 7. Furthermore, you may also be able to keep some of the assets that you would not be able to otherwise.

Over the course of three to five years, the court will require you to repay your secured debts, which are the loans that have some sort of collateral, such as a car or home. The agreed-upon monthly payment is made to the trustee assigned to your case, and money is then distributed to creditors. At the end of the payment plan, you will be current on your secure obligations, and unsecured debt is often discharged.

Florida residents who file for Chapter 13 bankruptcy are afforded the time and opportunity to reorganize their financial lives and eliminate some of their debts. The process can be complex, however, so having an attorney to represent you during the process is advised. Otherwise, you risk making a mistake that could jeopardize your case and, ultimately, your financial future.

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