When some people in New Port Richey decide to file for bankruptcy they may choose Chapter 7 bankruptcy, so they can get the process over with as soon as possible leaving them free to move forward on fresh financial footing. But filing for Chapter 13 bankruptcy has advantages too.
What is Chapter 13 bankruptcy versus Chapter 7 bankruptcy?
In Chapter 7 bankruptcy your non-exempt assets are sold, and the proceeds are used to pay back your creditors. The process can be completed in a matter of months. In contrast, in a Chapter 13 bankruptcy you enter a three- to five-year repayment plan in which you will make regular payments to your bankruptcy trustee who will then use these payments to pay back your creditors. In both a Chapter 7 bankruptcy and a Chapter 13 bankruptcy, once the process is complete, most (but not always all) of your remaining debts are discharged.
What are the benefits of a Chapter 13 bankruptcy?
There are several benefits to filing for Chapter 13 bankruptcy. One is that you may be able to keep all your assets, including your home. A Chapter 13 bankruptcy filing may even stop foreclosure proceedings, giving you time to catch up on missing payments over time. In addition, if you file for Chapter 13 bankruptcy you may be able to extend the amount of time you have to pay secured debts (except a mortgage) leading to lower payments. In essence, like a consolidation loan, you will only have to pay one monthly sum of money to your bankruptcy trustee so you will no longer have to directly deal with all your many creditors.
Learn more about Chapter 13 bankruptcy
Chapter 13 bankruptcy may be an attractive option to some in Florida who are facing overwhelming debts. It is important to educate yourself about the benefits of Chapter 13 bankruptcy so you can make an informed decision. This post is for informational purposes only and does not contain legal advice. Our firm’s webpage on Chapter 13 bankruptcy may be a useful resource to those who are considering this form of bankruptcy.