Chapter 13 Bankruptcy cases are sometimes called “Wage Earner's Plans” or “Debtor's Court.” In Chapter 13 you are given a chance to repay some, or all, of the debt you owe.
If you pay less than 100% of your unsecured debt, your case is known as a “composition case.” Such cases are also sometimes called “percentage cases.” Chapter 13 bankruptcy cases offer debtors unique opportunities to restructure their finances. Below are 20 benefits of filing a Chapter 13 Bankruptcy case:
1. You can file Chapter 13 even if you don't have a penny to pay toward your bankruptcy lawyer's fees. The majority, if not all, of the attorney fee you pay in a Chapter 13 bankruptcy case is taken out of the monthly payment you make to the Chapter 13 Trustee.
2. If you lose your job or become sick during your case you can request a temporary suspension of your Chapter 13 Plan payments.
3. You receive a discharge (debt is wiped out) of most debts listed in your case for which you propose a repayment plan.
4. If a general unsecured creditor, who is properly listed, fails to file a claim, you will not have to repay that debt.
5. Unlike debt management plans, creditors do not have a choice as to whether they participate in a Chapter 13 bankruptcy case. Creditors file a claim and get paid, or the debt owed to them is discharged at the end of your case.
6. Debt management plans often involve the payment of large sums of money to the Debt Management Company. It is much cheaper to file a Chapter 13 Bankruptcy Case.
7. Filing a Chapter 13 Bankruptcy Case hurts your credit less than participating in a Debt Management Plan.
8. While you are in Chapter 13, your creditors cannot bring suit against you. Creditors in debt management plans often sue debtors despite the debtor's efforts to work out an affordable repayment plan.
9. Many lenders will consider your timely payment of your Chapter 13 plan payment as a positive credit reference when you later apply for a loan.
10. Payday loans and title loans can be handled in Chapter 13.
11. You can strip off (wipe out) a junior mortgage on your home when the junior lien is totally unsecured.
12. You can repay taxes at no interest through a Chapter 13 bankruptcy case and stop all future penalties.
13. You can use Chapter 13 to immediately stop garnishments. You may even be able to recover some of the money taken from your check.
14. You can use Chapter 13 to cure arrearages (past due payments) on homes, cars, and leases.
15. Chapter 13 allows you to keep all of your property.
16. You can reduce the interest rate you pay on car loans and personal property loans.
17. In some cases you can even strip off part of the debt owed on cars and personal property.
18. The filing of your Chapter 13 bankruptcy case protects anyone who co-signed on a consumer debt with you.
19. You can file Chapter 13 more often that you can file a Chapter 7 bankruptcy case.
20. Filing a Chapter 13 bankruptcy case can allow you to get your driver's license back if it has been suspended for failure to have mandatory car insurance.
Are You Ready to Get Out of Debt?
If you want to know how Chapter 13 can help you get out of debt, call to schedule a free, no obligation, consultation with an experienced bankruptcy lawyer.