Advantages Of Chapter 13 Bankruptcy Vs. Chapter 7
There are a lot of people who instantly think Chapter 7 bankruptcy is better than Chapter 13, but this is not really the case. Chapter 13 offers some key advantages that are not available through Chapter 7, and here are the top ones.
It Offers Debt-Relief to People Who Make Too Much Money
You might not realize that there are income guidelines that you must meet in order to file for Chapter 7, and this often disqualifies people from using this branch of bankruptcy. With Chapter 13, there are also income guidelines to meet, but they are much higher, which makes them way easier for average people to meet. If you do not qualify for Chapter 7, the advantage of Chapter 13 is that you might be able to use this branch for relief from your debt problems.
You Will Not Lose Assets
The second advantage of Chapter 13 is that it will not require giving up assets you own. Instead, it will allow you to keep your assets, and this even incudes your house. If you happen to be behind on your house payments and are worried about foreclosure, you would not have to worry about losing your home if you choose Chapter 13. Chapter 13 does not cause you to lose assets. It instead gives you a chance to catch up on the payments you owe.
You Will Receive Time to Repay Debts and Protection from Creditors
The third benefit of Chapter 13 is probably one of the best advantages to know about. When you use this branch, not only will you receive an automatic stay, which protects you from creditor harassment, but you will also receive time to repay debts that would not have been discharged even if you had used Chapter 7. Chapter 7 provides no help for debts that do not qualify for a discharge. Instead, it only provides relief in the form of discharge for qualifying debts.
The automatic stay is something your creditors must follow, and it requires that they must not contact you for payment. They will be receiving the payment amount you agreed to pay in your repayment plan each month, and they cannot ask for more money from you. Additionally, debts like child support and alimony can be included in your repayment plan, which means you will be given a chance to catch up on these types of debts without worrying about legal consequences.
If you are interested in learning more about Chapter 13 bankruptcy, contact a lawyer in your area to schedule a meeting.