What are the benefits of chapter 13 (why file chapter 13 instead of chapter 7)?
The main benefit of chapter 13 compared to chapter 7 is that in a chapter 13 bankruptcy case the debtor gets to keeps all of his or her property and satisfies creditors claims through the chapter 13 plan. So, by way of example, if a debtor owned a house and wanted to keep living in it but is behind on mortgage payments, the debtor could cure the arrears (the payments that have fallen behind) through the plan and keep living in the house. Alternatively, in a chapter 13 case the debtor could seek to refinance or sell his or her house (subject to Bankruptcy Court approval). That is not usually possible in a chapter 7 case. If the debtor is a renter and has fallen behind on rent payments (but an eviction order has not yet been entered), for instance, due to a period of illness or unemployment, the debtor could use a chapter 13 plan to cure the defaulted portion of rent through the plan. Chapter 13 can also be used to keep a car where the debtor has fallen behind on payments. In addition, i
Related Questions
- I filed a Chapter 7 Bankruptcy case within the last 8 years, but again or still have debt I need help with. Can I file a Chapter 13?
- Whats the difference between Chapter 7 and Chapter 13? How do I know which chapter to file?
- What are the benefits of chapter 13 (why file chapter 13 instead of chapter 7)?
