You have choices for how to get out of debt.  Chapter 13 bankruptcy gives you more debt relief than Chapter 7 bankruptcy.  Bankruptcy lawyers should give free legal advice about Chapter 13, bankruptcy Chapter 7 and Chapter 11 bankruptcy when you consult about filing bankruptcy to get out of debt.

How Chapter 13 Lets You Keep Your Property

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Chapter 13 is a plan of reorganization where you propose to make a monthly payment that you can afford over a period of time, at least 36 months, to try to repay as much of your debt as you can. In Chapter 13, you’ll catch up on back mortgage payments, pay just what your vehicles are worth (not the full amount you owe), even adjust and eliminate certain taxes that would be unaffected by Chapter 7. You can also keep certain property that might be sold to pay creditors if you were filing a Chapter 7. At the end of the Plan, you are all caught up on your home, your vehicles are paid for, and all your other debts are eliminated. Again, with the exception of student loans and back child support, which will still be owed afterwards and will have continued to accrue interest.

Eliminate all your debt and keep all of your property

Chapter 13 is specifically designed to enable you to keep all your property. Even if you own property that you would lose in a Chapter 7, so long as your Chapter 13 plan proposes to pay your creditors at least the same amount of money as they would receive in a Chapter 7, you will be allowed to keep all your property and still eliminate all debt

Special debt reduction benefits of Chapter 13

An added benefit in a Chapter 13 case is your right to "cram down'' on secured creditors. For example, if you owe $15,000 on a $10,000 car, Chapter 13 allows you to pay the creditor just $ 10,000, plus interest, and then you own the car free and clear

Tax Liens

If tax liens have been recorded against your property, Chapter 13 allows you to payoff those debts and then remove the liens from your property

Chapter 13 and your mortgage

Chapter 13 specifically does not affect your home mortgage, except when you need to catch up and pay off an arrearage on your mortgage payments

 

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