If you're struggling financially and have fallen behind on your mortgage or car payments, then you may be considering bankruptcy. If so, you should talk to a bankruptcy attorney soon so you know what to expect and to develop a plan to save your home if that's what you want to do. Depending on your situation, filing for Chapter 13 bankruptcy might be right for you, but there are also other forms of bankruptcy to consider with the help of an attorney. Here are some reasons why Chapter 13 is sometimes the best choice.
You May Save Your Home And Property
A Chapter 13 bankruptcy is a way of restructuring your debt. Once you've fallen behind in payments, it's challenging to catch up and keep current at the same time. With this method of restructuring your debt, your past due payments are caught up over a period of several months so you can save your home and car from being taken from you. You'll also have to stay current with your regular payments, so your income, job stability, and debt amount play a role in determining if this is the right bankruptcy for you. However, if you want to save your home from foreclosure and your car from being repossessed, then Chapter 13 is an option to consider.
You Might Also Restructure Tax And Student Loan Debt
A Chapter 13 bankruptcy also helps you with other types of debt such as old tax debt, student loans, medical bills, and consumer debt like loans and credit cards. While you probably won't reduce or eliminate tax and student loan debt, the payment plan allows you to get caught up on old debt so the government won't take actions against your bank account, wages, or property.
You May Not Qualify For Other Forms Of Bankruptcy
You might originally think a Chapter 7 bankruptcy is right for you so you can give up your property, discharge your debt, and start a clean slate much sooner. However, if your income is too high or your debts too low, you may not qualify for Chapter 7. If you have the ability to repay the debt, the court may only allow you to file Chapter 13 bankruptcy so you can repay part or all of it.
An attorney can help you decide if Chapter 13 bankruptcy is right based on your income and other financial details. Although you'll be bound to a payment plan for a few years, you'll get to keep your property. Plus, filing for bankruptcy puts an end to collection harassment and legal actions as long as you keep up with payments on both restructured and current debt.