Bankruptcy is designed to be a way to help people that are struggling to pay off their debt, and there are two popular ways to do it for individuals. You can use either Chapter 7 or Chapter 13 bankruptcy to discharge your debts, with each one having its own advantages. Here are some reasons to consider Chapter 13 bankruptcy to get out from under your debts.
You Can Keep Your Property
A huge benefit of using Chapter 13 bankruptcy is that it allows you to hold on to your property, such as your vehicle and home. This is because you are reorganizing your debts under Chapter 13 and creating a repayment plan. In comparison, Chapter 7 bankruptcy works a bit differently. You end up liquidating assets, paying off as much debt as possible, and then discharging what remains. This means that you could lose your home and car when liquidating assets unless you have exemptions.
You Can Stop A Foreclosure
If your home is going to be foreclosed on, know that Chapter 13 bankruptcy will stop that foreclosure from happening. This is because you can include those missed mortgage payments in the repayment plan and slowly pay them off over time. This can help reduce the backlog of mortgage payments that you have missed, and restructure that debt so that it is more manageable.
You Can Protect Mortgage Co-Signers
Did you have someone that co-signed for your mortgage? A Chapter 7 bankruptcy can have a huge impact on their credit score that you will want to avoid. The nature of the repayment plan and keeping your home means that your co-signer is going to be protected by your bankruptcy. As long as you continue making mortgage payments and complete your repayment plan, you will not have a blemish on your or your co-signers credit report related to the mortgage.
You Can Lessen The Impact On Your Personal Credit Report
A downside of any type of bankruptcy is that it will appear on your credit report, which can make it harder to borrow money in the future. However, a Chapter 13 bankruptcy will show up on your credit report for a shorter period of time. This can allow you to repair your finances a bit faster, which can make a big difference if you need to borrow money down the road.
Reach you to a Chapter 13 bankruptcy lawyer for more information about using Chapter 13 for your debts.
Thank you for visiting my website. My name is Melanie. I am a 31-year-old woman who recently found myself unable to pay my bills following a devastating divorce. I created this website because I know there are a lot of misconceptions out there about filing for bankruptcy when you have student loans. I read about many of these misconceptions when doing my own research. Ultimately, I hired an attorney who helped me learn the truth. If you have loans, you may be able to get them discharged, though it is challenging and rare. If you are drowning in debt and have student loans as well, I hope my website helps you learn about bankruptcy and how student loans may affect it.