Chapter 13 is also known as “reorganization” or “wage-earners payment plan”, or “consolidation.” This is not a standard liquidation bankruptcy, which is Chapter 7. If your income is determined to be too high for a Chapter 7 procedure, but you are facing foreclosure on your home, auto repossessions or tax debts, Chapter 13 can help give you some breathing room. Nearly all debtors who file Chapter 13 keep their assets. This may also be the best option for joint husband/wife filings. Chapter 13 is a reduced repayment plan that allows you to pay all, or some, or hardly any of your bills and stops all attempts to foreclose on your property or garnish any of your wages. Chapter 13 even stops the I.R.S. and other State Tax Agencies from taking your money.
The Advantages of Filing Chapter 13 Bankruptcy
The main advantage of Chapter 13 Bankruptcy is that it provides stability. You simply make a monthly payment based on your earnings and the amount of property you have. By filing for Chapter 13, you can do the following:
○ Eliminates or pays off ALL debt, except those that the Federal Government has deemed “non-dischargeable” by the end of the payment period.
○ Pay off auto loans by the end of the bankruptcy period.
○ Puts an immediate stop to foreclosure sales of property.
○ Puts an immediate halt to wage garnishments and bank levies.
○ Pays off arrears on the home mortgage.
○ Prevents vehicle repossession.
The Advantages of Filling Chapter 7 Bankruptcy
The main advantages of Chapter 7 Bankruptcy are that it eliminates a massive amount of your debt in a limited amount of time. Chapter 7 Bankruptcy is a relatively quick and straightforward process, that generally takes a few months from start to finish. By filing Chapter 7 Bankruptcy, you can do the following:
○ Eliminate ALL debts, except those that the Federal Government has specifically deemed “non-dischargeable.”
○ Puts an immediate halt to wage garnishments and bank levies
○ Allows you to keep most property such as cars and vehicles as long as you are current on your payments.
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