There are two types of bankruptcy that most individuals file for -- Chapter 13 and Chapter 7. Chapter 7 is for those who don’t have much of an income. Chapter 13 is known as the “wage earner’s plan” and almost everyone who has a reliable, steady income must file Chapter 13. There are many advantages of filing for Chapter 13 bankruptcy, as explained by our bankruptcy lawyer.
Advantages of Bankruptcy
While this article serves to cover the benefits of Chapter 13, it’s important for you to know that no matter the type you file, the advantages of any bankruptcy are:
- Stops lawsuits, bank levies, and wage garnishments.
- Eliminates repossession and foreclosure.
- Wipes out qualifying unsecured debt, such as credit cards, payday loans, personal loans and medical bills.
- Stops creditors from harassing you.
Added Bonuses of Chapter 13
While any bankruptcy type will give you the above advantages, Chapter 13 provides additional bonuses, such as:
Elimination from credit report sooner: Chapter 7 and other types of bankruptcy remain on your credit report for up to ten years. Chapter 13 remains on your report for seven years.
Allows more discharged debt. Chapter 13 offers you the opportunity to discharge more debt, such as marital settlement debt (not alimony or child support) and non-priority tax debt interest and penalties.
More time to pay. Chapter 13 provides you more time to pay your creditors, usually between three and five years, as long as you pay the amount established amount each month.
No business operation interruption. If you own a business, the Chapter 13 repayment plan makes sure your business continues to make money during and after the bankruptcy.
For more information on filing bankruptcy, contact us to set up a consultation.