How will a chapter 13 bankruptcy work?

Chapter 7 vs chapter 13 bankruptcy

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Is chapter 13 bankruptcy better?

How can you be sure about which is the better solution for you? Earlier we looked at chapter 7 bankruptcy and how it can help to make a fresh start. The actual downside is that you have to sell your belongings. Let's take a look at the differences and see when chapter 13 bankruptcy is a safer solution.

For one - you won't need to sell your property, istead you'll be coming to an agreement to pay off your debt throughout 36 to 60 months. This is more time consuming than the chapter 7 bankruptcy, which can be ended in about 6 months, but you'll keep your property. The other part is that not everyone is eligible for chapter 7 bankruptcy.

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What to consider before applying?

Chapter 13 bankruptcy may be time consuming as you'll have to commit to a repayment plan for up to 60 months. But for those who want to make a success it can be a real lifesaver as you won't have to sell your belonging and property.

If you have past-due payments for:

  • Your current house
  • Your current vehicle, which is not older than two and a half years
  • Income tax past payments
  • Or such payments as alimony and child support

Chapter 13 bankruptcy can be solution to work through in order to keep all of this and still make a fresh start finance wise.

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Working through the repayment plan

In most cases chapter 13 bankruptcy states that you will have to make your payments through a payroll deduction. This can become inconvenient as you still have your usual expenditures each months:

  • House or car payments that weren't included in your chapter 13 bankruptcy
  • Ongoing child support or alimony
  • Property taxes
  • Insurance
  • Other expenses that you may have

To make the process most beneficial for you, decide which debts should be included or excluded from your bankruptcy, it can be helpful to seek professional help. We have gathered experience from many cases and their results, which enables our team to give the best advice.

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