Chapter 13 bankruptcy is a type of bankruptcy that allows you to make payments on the debts you owe over time. The bankruptcy lasts between three and five years, during which time you pay a set amount each month toward the debts you owe.
At the end of the bankruptcy, any remaining debts included in the Chapter 13 filing are discharged. While this kind of bankruptcy does require you to make payments, those payments could be lower than what you’re currently paying each month.
What are some of the benefits of Chapter 13 bankruptcy?
One of the primary benefits is that it can be used by those who don’t qualify for Chapter 7 bankruptcy. If you earn too much to file for liquidation bankruptcy, then Chapter 13 bankruptcy is a good alternative. With this form of bankruptcy, you can stop creditor harassment, put a stop to foreclosure actions and can keep your assets in most cases. So long as you make your payments on time, you won’t have to worry about creditors calling you or even having to pay the debts in full, depending on the total amount the court requires you to pay over the course of the bankruptcy.
Financial challenges make life tough, but bankruptcy is an option that you can pursue. Your attorney will talk to you about bankruptcy and the different kinds there are that you may want to file for. Our site has more on Chapter 13, Chapter 7 and other debt-reduction methods that are currently available to people who are in situations like yours.