Pros and Cons About Filing for Chapter 13 Bankruptcy
It’s important to know which type of Bankruptcy might be right for you. The sooner you discuss your case with a Terre Haute bankruptcy lawyer, the more options may be available to you. The following article presents some basic pros and cons about Chapter 13 Bankruptcy, though your individual needs may vary.
Advantages of a Chapter 13 Filing
As your Terre Haute bankruptcy lawyer can counsel, Chapter 13 filings might be used by an individual debtor whose income exceeds the limit required under a Chapter 7. Additionally, if you’ve recently gone through a Chapter 7 already, a Chapter 13 might be your best option. In it, you may be able to keep your property during the terms of the repayment plan. In a Chapter 7, you may be forced to liquidate it. Another major advantage relates to the decreased value of certain types of property. For example, if you owe $12,000 on your car, but it is only worth $9,000, the court may only require you to pay back the $9,000. Additionally, in a Chapter 13, cosigners of loans you may have taken out may also be protected by the automatic stay against collections.
Disadvantages of a Chapter 13 Filing
As a Terre Haute bankruptcy attorney can explain, a Chapter 13 filing does come with disadvantages. Your financial affairs will stay within the purview of the court for the length of the repayment plan. Many of the fees associated with filing are higher. Also, if you fail to make payments or your income situation improves, your creditors can take you back into court to seek increased payments or block the discharge of your debts.
With the help of experienced legal counsel, you can decide whether filing a Chapter 13 Bankruptcy is the best option under the circumstances.