The Benefits of Filing Chapter 13 Bankruptcy

DIFFERENCE BETWEEN CHAPTER 7 AND CHAPTER 13 BANKRUPTCY

Chapter 13 bankruptcy is the way we help someone who is losing their home, car or other property that is about to be lost through foreclosure or repossession to keep those assets and restructure the debt. Chapter 13 bankruptcy differs from Chapter 7 bankruptcy by providing a payment component that allows you to force unfriendly or uncooperative mortgage companies or lenders to let you restart payments and spread the defaulted amounts over as long as 5 years or even to completely restructure the debt. Chapter 13 bankruptcy is also a tool to deal with all other debt leaving you completely current and debt free at the end of the chapter 13 plan. Usually the credit cards, medical bills and other unsecured debt is wiped out with a minimal percentage payment.

BENEFITS OF CHAPTER 13 BANKRUPTCY

Chapter 13 bankruptcy is an alternative if you do not qualify to file Chapter 7 bankruptcy. For example if you have too much income, or received a Chapter 7 discharge within the last 8 years. There are times when life becomes tough and debt starts to mount in a hurry. No matter how bad the situation, there is always an alternative that will lead you back to better days. Filing for Chapter 13 bankruptcy in one such alternative which includes its share of benefits. Just as with Chapter 7 bankruptcy, when you file Chapter 13 bankruptcy you will immediately see an end to foreclosure actions, efforts to repossess cars or trucks, harassing phone calls, law suits, wage garnishment and every other type of collection activity. As is the case when you file a Chapter 7 bankruptcy, your credit score usually starts to improve and you begin rebuilding your credit.

CHAPTER 13 BANKRUPTCY PROTECTION

One aspect of Chapter 13 bankruptcy that many consumers can take advantage of is the protection it gives friends, family members and co-workers who may have co-signed with you. Under Chapter 13 the lender cannot go after cosigners and the debt that is cosigned can be restructured and repaid over 5 years. This relief is not available in Chapter 7 bankruptcy since it does not have a payment component.

A Chapter 13 bankruptcy will also bring all your past due taxes current providing a 5 year repayment plan with no interest accruing on the past due amounts while the plan is in place. You also can discharge many old taxes, just as you can in a Chapter 7 bankruptcy case.

STRIP OFF THE SECOND MORTGAGE WITH CHAPTER 13 BANKRUPTCY

If you have a second mortgage on your home a Chapter 13 bankruptcy can in many cases be stripped off the house and you will no longer have to pay it. You also can “cram down” other secured loans by reducing the amount paid in the Chapter 13 bankruptcy plan to the value of the car or truck and reducing the interest paid on the loan to a reasonable amount.

These remedies and powers that you have in a Chapter 13 bankruptcy case require a solid understanding of bankruptcy law to implement and to determine if they will work in your particular case. The Maryland Lawyer at Broumas Law Group can help you determine if Chapter 13 will allow you to take advantage of these benefits in a Chapter 13 bankruptcy case. Proudly serving Baltimore and the surrounding areas, Broumas Law Group continues its commitment to excellence while upholding high standards in the practice of law.