4 Key Advantages Of Chapter 13 Bankruptcy Vs. Chapter 7

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.


Figuring Out My Finances

For years, I lived on the edge of a paycheck. I was always running out of money, wondering when I would be paid next, and hoping for extra bonuses. Unfortunately, one day my luck ran out, and I found myself without a way to pay my rent. My landlord wasn't patient with me, and I actually got kicked out of my place. It was devastating and embarrassing, but I knew that there had to be a way to repair my finances. I met with a bankruptcy attorney to talk with me about my debts, and she was incredibly helpful. After seven years, I was able to completely correct my credit, and it has changed my life. Check out this blog to learn more about bankruptcy.

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