When you seek advice about bankruptcy, you might initially think that Chapter 7 sounds a lot better than Chapter 13 bankruptcy; however, this is not always the case. Chapter 13 can often help with a lot more issues than Chapter 7 helps with. Here are some important things to understand about the effects Chapter 13 can have on your finances and debts.
It is available when you do not qualify for Chapter 7
The first thing to understand is that not everyone qualifies for Chapter 7 bankruptcy. To use Chapter 7, you must meet income guidelines, which not everyone will meet. If your income exceeds the guidelines, you cannot use Chapter 7; however, you will probably be able to use Chapter 13. Therefore, Chapter 13 is a great option when you cannot use Chapter 7 due to your income amount.
Chapter 13 gives you time to pay debts along with relief from harassment
The second thing you should know is that Chapter 13 will give you time to pay debts you have, whereas Chapter 7 will not. The best part is that you will receive relief from creditor harassment throughout the entire repayment plan in Chapter 13. This means that you will not have to worry about getting phone calls from your creditors during this time. Instead, you can make your payments to the trustee and live your life in a more stress-free manner.
It may help you save your home
Chapter 13 also offers the ability to save your home if you are behind on payments, whereas Chapter 7 does not give you this chance. If you missed one payment or multiple payments in the past, filing for Chapter 13 will give you the opportunity to work out a plan with your lender to get caught up. You will not lose your house if you reach a plan and make the payments you are told to make.
It can still offer a discharge of debts
The other thing to realize is that Chapter 13 still offers a discharge of qualifying debts in many cases. The difference, though, is that you will not receive the discharge until the end of your repayment plan. At that point, though, the trustee is likely to cancel certain debts you have, and this will leave you in a great financial position at the end of your repayment plan.
These are the top benefits of choosing Chapter 13 bankruptcy. To find out if this branch is right for you, talk to a bankruptcy lawyer or visit websites like georgettemillerlaw.com today.