To most people’s minds, Chapter 7 bankruptcy is the default option when considering bankruptcy. Filing for Chapter 7 bankruptcy can wipe off your debts and provide you a clean financial slate. Individuals who do not qualify for Chapter 7 because to a low income or other factors may be required to file under Chapter 13. Even though it would be understandable to feel down about your situation, you shouldn’t.
If you want good guidance before filing for bankruptcy, a Chapter 11 business bankruptcy attorney is the person to talk to.
This is a list of some of Chapter 13 bankruptcy’s long-term benefits.
You Are Only Charged What You Can Afford
When you file for bankruptcy, a trustee will help you come up with a plan to pay back as much of your debt as possible. The trustee will collect payments from you each month and disperse them to your debtors. These payments may seem like a hassle, but they are actually quite beneficial. If you are having trouble making payments at the moment, you may be able to have them postponed until you are in a better financial position.
One May Still Get a Debt Discharge
Chapter 13 bankruptcy relies heavily on the repayment plan, but that doesn’t imply you have to pay back every last cent of your debt. In most cases, you won’t be required to pay back all of your debt, and even if you do, you won’t be charged any interest on the amount you pay back in full. Only the debt balance that existed when you filed for bankruptcy will be discharged.
Houses Can Be Saved.
Chapter 13 bankruptcy is more popular than Chapter 7 since it allows homeowners to keep their property. Mortgage arrears can be incorporated into the repayment plan, and the full amount owed can be repaid within three to five years.
Evict Competing Mortgages
In Chapter 13 bankruptcies, it’s common for homeowners to have multiple sdasrinagar mortgages on their property. After all, they are in a financial bind, and an additional mortgage loan can often help them get back on their feet. These second mortgages can be discharged in Chapter 13 bankruptcy. Getting rid of a lien is what the term “lien stripping” describes.
If you want to be eligible for lien stripping, the value of your home on the day you filed for bankruptcy must be greater than or equal to the amount you owed on your original mortgage.
