Why A Chapter 13 Bankruptcy? Here"s A Few Reasons
With all the people filing for bankruptcy these days it seems that most are only interested in filing Chapter 7.
When a friend calls and tells you they're going to file for bankruptcy, the first thing that most people think is Chapter 7.
Chapter 13 bankruptcy is a very powerful tool when used in the right circumstances.
A Chapter 7 bankruptcy is usually best used when an individual has a large amount of unsecured debt and a blue-collar job.
You see, to qualify for Chapter 7 the debtor needs to come in at the median income for their state or below.
Over the last few years, the median income has been dropping due to unemployment and employers reducing wages to be competitive.
This in itself is making it tougher and tougher to qualify for Chapter 7 bankruptcy.
For those that make a substantial household income, there is Chapter 13 bankruptcy.
And with Chapter 13 comes the vast array of benefits that most people haven't even heard of.
One tip that most individuals should take heed, Chapter 13 bankruptcy is best served with the help of a bankruptcy attorney.
If you're an individual on the fence and have made the decision to file bankruptcy but still don't know which chapter to pick, here's a few reasons to take a serious look at Chapter 13 bankruptcy.
It has a lot to offer for those who just had some bad luck and basically want to reduce and consolidate their debts without losing any property.
It doesn't hurt to discuss this with a bankruptcy attorney and see how it works for your situation.
When a friend calls and tells you they're going to file for bankruptcy, the first thing that most people think is Chapter 7.
Chapter 13 bankruptcy is a very powerful tool when used in the right circumstances.
A Chapter 7 bankruptcy is usually best used when an individual has a large amount of unsecured debt and a blue-collar job.
You see, to qualify for Chapter 7 the debtor needs to come in at the median income for their state or below.
Over the last few years, the median income has been dropping due to unemployment and employers reducing wages to be competitive.
This in itself is making it tougher and tougher to qualify for Chapter 7 bankruptcy.
For those that make a substantial household income, there is Chapter 13 bankruptcy.
And with Chapter 13 comes the vast array of benefits that most people haven't even heard of.
One tip that most individuals should take heed, Chapter 13 bankruptcy is best served with the help of a bankruptcy attorney.
If you're an individual on the fence and have made the decision to file bankruptcy but still don't know which chapter to pick, here's a few reasons to take a serious look at Chapter 13 bankruptcy.
- The number one reason for Chapter 13 is it will stop foreclosure and allow you to keep your property if you choose.
This is where this type of bankruptcy filing is king.
It will allow the debtor to negotiate with the lender and get caught up on back payments, while being able to stay in the house.
This also works with other secured property. - The number two reason is the flexibility of Chapter 13 bankruptcy.
During the Chapter 13 plan the debtor can choose to dismiss the filing at any time or convert it to a Chapter 7 bankruptcy.
The payment plan is over a 3 to 5 year time frame and many times things change in people's lives sometimes making the payment plan not feasible.
All the debtor has to do is notify their bankruptcy attorney to modify the bankruptcy plan to make it fit in your life. - The number three reason is something that is becoming very commonplace since the real estate market collapsed in 2007.
Many Americans took out seconds and thirds on their house just to have all the equity taken away and end up owing way more than the value of the property.
In many cases, the court will strip the second and third off of the property making it unsecured debt.
In a Chapter 13 bankruptcy, unsecured creditors are the last to be paid and they usually are only paid a small percentage back. - Number four is if you choose you won't lose any nonexempt property.
When the debtor gets together with their bankruptcy attorney, they can discuss the value of items and whether to give it back to the creditor or to continue paying for it. - The Number five reason to file Chapter 13 bankruptcy is there are way more categories of debts that can be negotiated and/or wiped out.
- And the last reason is the bankruptcy trustee wants the Chapter 13 bankruptcy plan to work and will help the debtor do whatever it takes to come up with a feasible plan.
It has a lot to offer for those who just had some bad luck and basically want to reduce and consolidate their debts without losing any property.
It doesn't hurt to discuss this with a bankruptcy attorney and see how it works for your situation.
