Chapter 13 Bankruptcy

Along with Chapter 7, individuals may consider filing a Chapter 13 bankruptcy. This short article is designed to create some understanding around the differences between Chapter 7 and Chapter 13, and why you might choose Chapter 13.

Save Your House Or Car With Chapter 13

Chapter 13 allows you to keep making your normal mortgage payments and car payments while slowly making up the amount you are behind.

Force Your Creditors Into A Court-Approved Plan

Once your Chapter 13 plan is approved by the court, your creditors must honor it. This means both secured (house, car) and unsecured (medical bills, credit card bills) have to honor the plan.

Pay A Small Percentage To Unsecured Debt

Your Chapter 13 plan payment each month is a function of your “ability to pay”. For most clients, this means you pay a small percentage to unsecured debts. This is a large part of what enables you to afford a Chapter 13, while simultaneously getting caught up on your house or car.

Address Taxes In Chapter 13

Taxes are somewhat complicated in Chapter 13 but if your taxes are 3 years old or older and you filed your returns on time, you can address tax debt in Chapter 13. This prevents the IRS and the state from garnishing your paycheck and charging penalties.

In Summary

While a Chapter 7 filing is an arguably easier and undeniably faster way to discharge debt, a Chapter 13 filing often helps you accomplish your longer-term goals and objectives. Your attorney can help you sort through the options quickly and easily.

Email me at [email protected] or call 704.749.7747 today to discuss your situation. I answer my own telephone and I would be happy to hear from you.