6 reasons why Ch 13

TOP SIX REASONS TO FILE CHAPTER 13 BANKRUPTCY

There is a stigma attached to filing bankruptcy which makes many people think that only deadbeats and losers file bankruptcy. But bankruptcy is legal and it is meant to help hardworking, honest people, just like you, resolve their financial problems and get a fresh start. Following are the top six ways that filing bankruptcy can benefit you.

REASON #1 – Filing bankruptcy stops ALL collection efforts by your creditors.
The moment you file bankruptcy, the automatic stay becomes effective. This is true whether you file a Chapter 7 or a Chapter 13 case. The automatic stay prevents your creditors from making collection efforts against you and your property. This means that your creditors are prohibited from:

· Calling you;
· Writing to you;
· Repossessing cars and other property;
· Foreclosing on your home or other real estate;
· Filing lawsuits against you;
· Prosecuting lawsuits which have already been filed against you;
· Garnishing your wages;
· Levying on your bank account or other property; and
· Making any other efforts to satisfy the debts you owe.

REASON #2 – Filing Chapter 13 bankruptcy allows you to repay mortgage and auto loan arrearages and arrearages on other secured debts over time rather than in a lump sum.
When you are behind on mortgage payments, car payments, and other secured debt payments, bringing those payments current can be very difficult. Unless you are able to negotiate a work out plan with the creditor – and usually you won’t be able to – you will be expected to cure the arrearage by making a lump sum payment. But when you file a Chapter 13 bankruptcy, delinquent payments on all secured debts are paid in installments through the Chapter 13 plan.

REASON #3 – Filing Chapter 13 bankruptcy may allow you to reduce the amount owed on unsecured debt or to eliminate unsecured debt completely.
When you file a Chapter 13 bankruptcy, you must submit your proposal for how you will repay your debts. This plan is known as the Chapter 13 plan. Depending on your income and expenses, you may be able to pay your general unsecured creditors a fraction of what you owe them. As a matter of fact, some Chapter 13 debtors are even able to wipe out their unsecured debts without paying a dime to those creditors. Any balances owing on unsecured debts at the successful completion of your Chapter 13 case will be discharged. A discharge relieves you of any further legal or financial liability for those debts.

REASON #4 – Filing Chapter 13 bankruptcy may allow you to reduce the amount you owe on certain unsecured debts to the present value of the property securing those debts.
If you are upside down in an auto loan or underwater in a mortgage, you may be able to eliminate the unsecured portion of the debt. Whether this option is available to you depends on a number of factors which the bankruptcy attorneys at Bankruptcy Professionals can explain to you.

REASON #5 – Filing Chapter 13 bankruptcy may allow you to eliminate wholly unsecured junior liens on certain property.
The Bankruptcy Code allows debtors, under certain circumstances, to eliminate wholly unsecured junior mortgages on real estate and other property. If you are able to do this, the junior lien will be classified as a general unsecured debt and will receive a pro rata share of all monies allocated for payment to general unsecured creditors in your Chapter 13 plan. There are a variety of factors which impact your ability to avoid junior liens on your property and our bankruptcy attorneys will be happy to review your case to determine whether avoidance of junior liens is an available option for you.

REASON #6 – Filing Chapter 13 bankruptcy allows you to begin rebuilding your credit immediately.
Chapter 13 allows you to immediately begin rebuilding your credit by making payments on some of your debts. So, your debt to income ratio will gradually improve as your debts are paid through the Chapter 13 plan. Additionally, all aging on delinquent accounts stops when you file bankruptcy. This means that your creditors can no longer report to the credit bureaus each month that the delinquency continues to exist. Moreover, once you complete your Chapter 13 case and receive a discharge, all debts discharged in the bankruptcy must be reported as such on your credit report, resulting in an improvement to your overall credit rating.

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