How Chapter 13 is Better than Chapter 7

Ch 13 better than Ch 7 pic

Hopefully you have read our blog titled “How Chapter 7 is Better than Chapter 13,” to learn more about the advantages of a Chapter 7 filing. This blog will focus on the many benefits of a Chapter 13 case.

Debt Consolidation

A Chapter 13 filing is a reorganization process which allows you flexibility in how to deal with your debt. A Chapter 13 debtor creates a repayment plan that sets forth how you intend to pay your creditors, either fully or partially. You make one monthly payment to the Chapter 13 trustee who then pays your creditors as set forth in your plan.

Unsecured Debts

Your unsecured debts will be included in your Chapter 13 repayment plan and you are required to pay a percentage of them (0 to 100%), depending on your finances. In most cases, the debtor only pays a very small percentage of the unsecured debts owed, including credit card and medical bills.

Secured Debts

If you are delinquent on your mortgage or car loan payments, you can make small payments through your Chapter 13 plan and get caught-up on your secured loans. Since your plan lasts three to five years, the smaller monthly payments can be applied to the past due amounts.

Lien Stripping

You may be able to eliminate a second or third mortgage in a Chapter 13 filing by using the lien stripping process. To learn more, please read our blog titled Stripping Off Junior Mortgages in Bankruptcy.”

The above are just a few examples of the benefits offered by filing a Chapter 13 bankruptcy. If you are interested in learning more about how a bankruptcy filing will impact your debt, contact Faro Crowder, PA to schedule an appointment.


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