If you’ve been struggling to pay bills on time, beginning to fall behind or have been behind for a sustained period of time, you might be considering filing for bankruptcy.
The single most common reason to file a Chapter 13 instead of filing a Chapter 7 is that you own an asset that you want to protect. Most commonly, that asset is a substantial amount of equity in the home that cannot be protected in a Chapter 7.
Filing a Chapter 13 – which allow individuals with regular sources of income to set up plans to make installment payments to creditors over three to five years – has several benefits. Here are some:
- Halts all debt collectors
- Stops the foreclosure process
- Keeps you in your home (although you still need to make your mortgage payments)
- Can buy you time to request a loan modification from your mortgage company
- Pays off accumulated debt (often at a fraction of what is owed on paper)
- Can take up to 60 months, depending on the length of the repayment plan, to have debts completely discharged
If you’re thinking about filing a bankruptcy petition, or have questions about the process, please call Winslow & McCurry, PLLC at (804) 423-1382.
