Posted on: 26 June 2020
If you want to get through your bankruptcy case as quickly as possible, you might pick chapter 7 if you can use either branch. Chapter 7 provides benefits to people, but it is not the best option for everyone. If you have the choice to use chapter 7 or chapter 13, here are four key advantages you should understand about chapter 13.
Chapter 13 Stops a Foreclosure
When a person seeks help through bankruptcy to prevent foreclosure, the choice is easy. Chapter 13 is the only branch that ends a foreclosure. Chapter 7 cannot do this. If you have a past-due balance on your home loan when using chapter 7, you will lose your house if you cannot pay the past-due balance.
Chapter 13 Eliminates Mortgage Liens
Not only does chapter 13 stop foreclosures, but it also helps in an additional way. It helps people with underwater mortgages. If you have a second loan on your house or even a third loan, you can get these loans eliminated through chapter 13. This branch is the only option for stripping second and third loans from homes with underwater mortgages. Therefore, not only can you keep your home in a chapter 13 case, but you can also owe less on it due to the lien-stripping process.
Chapter 13 Discharges Remaining Debts at the End of the Case
The downside to chapter 13 is the length of the plan. It may take five years to complete it, but the good news is that it discharges remaining debts at the completion. The debts it discharges upon completion include unsecured, qualifying debts, such as credit card balances. You may have to pay some of the balances on your credit cards through your repayment plan, but you likely will not have to pay the full balances.
Chapter 13 Lets You Keep Your Assets
The final advantage of chapter 13 is it lets you keep your assets. If you have cash on hand when filing for chapter 13, you can keep it. You can also keep your house, cars, and personal belongings. You will not lose anything you own if you choose chapter 13 instead of chapter 7 bankruptcy.
Chapter 7 has advantages, too, but if you want to reap the benefits listed here, you should choose chapter 13. To learn more about bankruptcy and the options available, talk to a local chapter 13 bankruptcy lawyer today.Share