Why you may choose to file for Chapter 13 bankruptcy even if you are eligible for Chapter 7

It’s no secret that many individuals who decide to file for bankruptcy hope they will be eligible for Chapter 7; while Chapter 13 is known as the income-based bankruptcy, it takes exponentially longer to complete, and does require most creditors to be paid off, ultimately. However, it is possible to discharge some debts without payment to them in a Chapter 13 case. There may be some reasons why you are interested in Chapter 13 though, even if you qualify to pass the means test for Chapter 7 and your income is below that of the median household in the state of Georgia.

If you do have disposable income left over each month from your paycheck or other income sources, Chapter 13 could be very helpful—and especially if you are hoping to keep all your assets.You may also have significant assets that you want to keep but are struggling to do so currently. Here, bankruptcy can be such an incredible financial tool, saving you not only from disastrous circumstances, but also setting you on your way to greater financial freedom and success in the future, allowing you and your family to move forward and thrive later.

If your home is in danger of foreclosure, the automatic stay will protect you whether you file for Chapter 7 or Chapter 13, but in Chapter 7 the automatic stay for halting collections activities from creditors like a mortgage lender is short term and you may only be gaining a couple of months of breathing room to decide how you want to deal with your mortgage lender. Typically, a Chapter 7 works best if you are current on secured payments such as a house or vehicle. If you are struggling to pay or are delinquent in house and car payments, a Chapter 13 case often is more beneficial if you wish to keep those assets.

In a Chapter 13, you may be able to structure your bankruptcy so that you can reorganize your mortgage arrears into your bankruptcy. This does mean that you must keep up with all your ongoing monthly mortgage payments too. With vehicles, you may be behind on car payments, and worried about repossession. With Chapter 13, again, you can plan to pay back your creditor along with keeping the car, and sometimes even pay less than what you owe. In some situations, there may be assets you do not want to keep, and that your attorney can help you with surrendering them should that be desired.

You probably have many questions about bankruptcy, from wondering how much you will have to sacrifice (very little in most cases), to whether you will have to go to court. Pre-planning may be in order also if you have a tax refund on the way or other assets that must be protected. Speak with a skilled bankruptcy attorney from the offices of H. Lehman Franklin, P.C. Call now to learn more at 912-764-9616, or contact us online.