Most people who are considering bankruptcy only look at Chapter 7. It is by far the most common type of bankruptcy that is filed and usually what people are referring to when they think of the term ‘bankruptcy.’ You are in and out of bankruptcy in just a few months, most debts are discharged and, with very generous exemptions (protections of certain property) available, most people do not lose any property. However, by looking only at Chapter 7, people sometimes overlook the powerful features of Chapter 13. Most people look at Chapter 13 only if they are behind on their mortgage or car payments. (Chapter 13 can force the mortgage company and car loan company to accept small payments over the course of the Chapter 13 plan period — from 36 to 60 months — to catch up on the missed payments. Chapter 13 can also modify the terms of secured loans, from lowering interest rates to paying back only the fair market value of the collateral. Chapter 13 also allows you to be protected from creditors that cannot otherwise be discharged in bankruptcy, such as student loans.
There are many unique and powerful uses for Chapter 13. Look around this web site or call us to discuss how Chapter 13 can make a difference in guaranteeing a fresh start.