Chapter 13 Bankruptcy is also known as a “wage earner’s plan” because it allows individuals with regular income the chance to create a plan to repay all or part of their debts. In direct contrast, under Chapter 7 bankruptcy all of a debtor’s assets are liquidated to repay creditors with just a few exemptions. Under Chapter 13, you have the ability to pay off all or some of your debts over the course of up to five years and no less than three. Under no circumstances are you required to pay for longer than five years, and laws prohibit creditors from starting or continuing collection efforts.
Avoid Foreclosure
Chapter 13 Bankruptcy in St. Charles, MO was created to offer debtors the opportunity to avoid foreclosure on their homes. This is arguably the most significant benefit of this filing. If you file under Chapter 13 bankruptcy, you can stop foreclosure proceedings and even cure delinquent mortgage payments over time. It is important to note that you are still responsible for mortgage payments that are due during the Chapter 13 plan. Through this, you can make up for missed payments on mortgage and car loans. Firms such as Van Dillen & Flood, P.C. can help you file.
Credit Reports
Chapter 13 also has a credit report advantage over Chapter 7. This filing will show up on your credit report for seven years while Chapter 7 is shown for ten. Although seven years might seem like a long period of time, the difference is significant. The impact on your credit is also far less than under Chapter 7. This is especially important because creditors and lenders use your credit report to determine vehicle financing, renting or housing, and credit card limits. If you find yourself overwhelmed with debt and do not know where to turn, contact a reputable firm to find out which chapter you qualify to file under. Click here for more details.