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3 benefits of Chapter 13 bankruptcy

On Behalf of | Jul 14, 2021 | Bankruptcy |

If the loss of your home is keeping you from considering bankruptcy, it should not. Chapter 13 bankruptcy allows you to keep your home and rid yourself of some of the debt that burdens you.

Chapter 13 does not require you to liquidate assets in exchange for discharging debt. Instead, it allows you to combine a portion of what you owe into affordable monthly payments. Take a look at three benefits Chapter 13 bankruptcy may provide.

1. Pay an affordable amount

The goal of Chapter 13 is to give you a fresh start while allowing you to keep assets. Your home, for example, will remain safe from foreclosure as the trustee works to negotiate an affordable payment. After restructuring debt to secured creditors, the trustee calculates a percentage of the remaining debt you can afford to pay. The trustee sets up one monthly payment you make when indicated.

2. Limits the time you have to pay

The Chapter 13 payment plan may continue for up to five years. The length of time you have to pay depends on your income, total debt, and household size. Considering that some of these debts may have taken a lifetime to pay, five years is not horrible.

3. Discharges remaining debt

If you make all the requisite payments under your Chapter 13 plan, at the end of the associated term, you appear before the judge. The trustee’s report will provide the court with the details of your payment plan and the amount left. Should the court find you have sufficiently paid what the trustee indicated, the judge will discharge all remaining unsecured debt, such as credit cards.

You are likely looking for a way to reboot your financial situation. Under Chapter 13, you have the ability to do just that.