Benefits of Chapter 13 Bankruptcy
If you find that you can no longer afford to pay your debts, bankruptcy might serve as your best opportunity for resolving your financial difficulties and getting a fresh start. As an individual, you may have the option to file for a chapter 13 bankruptcy, in which you slowly pay back some or all your debts over a multi-year period. Filing for chapter 13 bankruptcy can offer you several benefits over pursuing a bankruptcy case under chapter 7.
If you have questions about chapter 13 bankruptcy, turn to the North Carolina bankruptcy attorneys of Sasser Law Firm. For more than 20 years, our lawyers have exclusively practiced bankruptcy law. Our firm includes three board-certified bankruptcy specialist attorneys. Our legal team has deep and varied experience, having handled over 9,000 bankruptcy matters before the federal bankruptcy and district courts and even taking several cases on appeal to the Fourth Circuit.
We handle chapter 7 and chapter 11 bankruptcies in addition to chapter 13 cases. We can also help in emergency situations, such as foreclosure or repossession. We have the knowledge and experience to take on the toughest cases, including appealing cases when necessary.
When you contact our firm, you’ll speak directly with a chapter 13 bankruptcy attorney, rather than being passed off to a paralegal or case manager. We want to help you pursue the best course for you, so you will never feel any pressure to file for bankruptcy. We strive to prove a straightforward explanation of how we work and our fee structure.
With us, no fees are due to us directly when you choose chapter 13 as our firm is paid through the monthly plan payments made to the chapter 13 trustee. Contact us today for a free initial case evaluation to discuss whether filing for chapter 13 bankruptcy can help you resolve your debts and/or financial troubles.
Now, here are some of the most important benefits of filing Chapter 13.
You Can Keep Your Property and Assets
Arguably, the biggest benefit to filing for chapter 13 bankruptcy compared to filing for a chapter 7 liquidation bankruptcy is that you can always keep your assets with a chapter 13.
A chapter 7 bankruptcy may result in non-exempt property you own being liquidated to generate funds to pay back your creditors. In most chapter 7 cases there is no liquidation of assets but it is possible. In contrast, in a chapter 13 bankruptcy, you are a debtor-in-possession of your property, which forms the bankruptcy estate. Your creditors are paid back according to the terms of a repayment plan that you propose and that is approved by the bankruptcy court.
There is never an involuntary loss of assets in a chapter 13. A chapter 13 debtor can choose to sell a property.
Consolidate Your Debt into One Affordable Payment
Many people fall into trouble with debt due to having to make payments to multiple creditors. People end up missing payments and accumulating significant interest, fees, and penalties, or they find themselves unable to make the minimum payments on all their outstanding debts.
In a chapter 13 bankruptcy, your unsecured debts are effectively consolidated into one payment. Rather than making individual payments to each of your creditors, you make one monthly payment to a bankruptcy trustee, who then uses those funds to pay your creditors according to the terms of your court-approved chapter 13 repayment plan.
Under chapter 13, you can also extend the time you have to pay certain debts such as delinquent taxes, child support arrears, or secured debts on household goods and auto loans.
If you remain in compliance with your payments, at the end of the repayment plan, many types of outstanding unsecured debts are discharged by the bankruptcy court. This can make financial planning easier when you know exactly how much money you will need to pay every month towards your debts.
Certain debts, including but not limited to student loans and criminal restitution, cannot be discharged in chapter 13.
Less Time Listed on Credit Reports
A chapter 13 bankruptcy also gets listed on your credit report for less time than a chapter 7 bankruptcy.
Rather than the ten years that a chapter 7 bankruptcy stays on your credit report, a chapter 13 bankruptcy is only listed on credit reports for seven years.
You Can Avoid Foreclosure
Another advantage of chapter 13 is that you can potentially avoid foreclosure on your home. Under the chapter 13 repayment plan, you can catch up on your past-due mortgage payments through your mortgage repayment plan. The bank cannot foreclose on your home so long as you continue to make your normal monthly payments under your mortgage after filing your bankruptcy petition.
If a secondary mortgage is fully unsecured, you may be able to have that stripped off in a chapter 13 and treated as an unsecured claim during the case and discharged upon completion of the plan and entry of a discharge.
Automatic Stay
One of bankruptcy’s most critical benefits for debts involves the automatic stay. Once you file for bankruptcy, your creditors are required by law to cease all efforts to collect debts from you. This includes ceasing all phone calls, letters, emails, or other communications, along with pausing any litigation efforts against you.
Instead, your creditors are only permitted to pursue repayment through the bankruptcy court. A creditor must obtain specific approval from the court if it wishes to resume collection efforts against you. This can give you relief from the stress and anxiety of having to deal with numerous phone calls or letters from creditors or collection agencies.
In addition, filing for chapter 13 stops the accumulation of late fees and penalties on your debts, which can make paying your debts more affordable.
It Costs No Money Upfront To File Chapter 13 Bankruptcy With Sasser Law Firm
When you are already facing financial troubles from unmanageable debt, it can prove difficult to come up with the upfront money needed to start a bankruptcy case. However, Sasser Law Firm does not require any upfront fees or costs to file chapter 13.
Contact a North Carolina Chapter 13 Bankruptcy Attorney Today
If you are considering filing for Chapter 13 bankruptcy to help sort out your debts and other financial issues, contact Sasser Law Firm or give us a call at (919) 319-7400 today for a free, confidential consultation. Talk to a North Carolina bankruptcy attorney about the benefits of a Chapter 13 bankruptcy and learn more about whether bankruptcy may be the right option for you.
