While Chapter 7 bankruptcy is the most common type in the United States, thousands of people benefit from Chapter 13 filings each year. Chapter 13 is a different – and longer – process, though it can still provide valuable debt relief for many households. Below are some common questions about this type of bankruptcy, and to learn more, call a Chapter 13 bankruptcy lawyer in Memphis today.
When is Chapter 13 Bankruptcy Right for Me?
Chapter 13 is right for many people, though it is not the best choice for everyone. Some circumstances that may lead to the decision to file under Chapter 13 include:
- You earn more than the maximum household income allowed for Chapter 7
- You have property and assets you want to protect from Chapter 7 liquidation
- You have debts that cannot be addressed in a Chapter 7 case
What Debts Can I Discharge in a Chapter 13 Case?
The debts eligible for discharge in a Chapter 13 bankruptcy are similar to Chapter 7, and they include low-priority unsecured debts including credit cards, personal loans, medical bills, and more. However, Chapter 13 can address other types of debts, including second mortgages, in a different manner. Chapter 13 requires a three to five-year repayment plan, and the bankruptcy trustee distributes your payments to priority creditors. Many debts are paid in full during the repayment plan, so there is no need for them to be dischargeable. The remaining low-priority debts may then be discharged.
Can Chapter 13 Help Prevent a Foreclosure?
The automatic stay will halt a foreclosure proceeding (at least temporarily), and you can wrap your mortgage arrears into your repayment plan. While there is no guarantee that you will avoid foreclosure, Chapter 13 bankruptcy can provide solutions and leverage when negotiating with your mortgage lender.
Contact a Chapter 13 Bankruptcy Lawyer in Memphis Today
Hurst Law Firm, P.A. helps clients decide what type of bankruptcy is right for them, and a Memphis Chapter 13 bankruptcy attorney can help you with every step of the process. Call 901.725.1000 or contact us online for a consultation today.