Benefits And Limitations Of Chapter 13 Bankruptcy
If you are thinking about filing for Chapter 13 bankruptcy, it is important to understand the various ways in which Chapter 13 bankruptcy can be beneficial to consumers, and the ways in which it can also have disadvantages. Before you make any decisions about filing for Chapter 13 bankruptcy or any type of bankruptcy, you should seek advice from a bankruptcy attorney who can assess your circumstances and help you to determine how to move forward with a bankruptcy case. In the meantime, the following are some of the pros and cons of a Chapter 13 bankruptcy filing in West Palm Beach.
Advantages of a Chapter 13 Bankruptcy Filing
What are some of the key advantages of a Chapter 13 bankruptcy filing? The following are some of the pros of filing for Chapter 13 bankruptcy in Florida:
- You can reduce the overall amount of debt you owe as long as you fulfill the terms of your repayment plan;
- You will not have to have any of your property liquidated since Chapter 13 bankruptcy is not a liquidation bankruptcy;
- You will have an extended period of time—three to five years—to pay the debts you owe through your repayment plan, allowing you to rebuild your credit and your finances during that time;
- You can get caught up on payments associated with secured debt, such as a car loan or your mortgage;
- You can stop a foreclosure from happening through the automatic stay, and then through the reorganization of your debts and associated repayment plan, you can get back on track with mortgage payments in order to avoid foreclosure altogether and remain in your home.
In a Chapter 13 bankruptcy case, a debtor must earn a regular wage in order to be eligible. For this reason, Chapter 13 is often known as a wage earner’s plan. If you are interested in the advantages of Chapter 13 bankruptcy, you should discuss your options with a bankruptcy lawyer.
Limitations of a Chapter 13 Bankruptcy Filing
What are some of the disadvantages or cons of Chapter 13 bankruptcy? The following are some of the limitations to consider:
- Chapter 13 bankruptcy cases take a long time, especially in comparison with Chapter 7 bankruptcy cases (usually three to five years for Chapter 13 bankruptcy, as opposed to four to six months for a Chapter 7 bankruptcy case);
- You will not be able to receive a quick discharge of your debts in order to get the kind of fresh start associated with a liquidation bankruptcy;
- Your disposable income must be used to repay your debts during the repayment period; and
- You will not be able to discharge certain debts at the end of the bankruptcy process, including any debts that are non-dischargeable under the U.S. Bankruptcy Code (this is also true of a Chapter 7 bankruptcy case).
Contact Our West Palm Beach Chapter 13 Bankruptcy Attorneys
If you are considering Chapter 13 bankruptcy or need assistance with your case, you should get in touch with one of our experienced West Palm Beach Chapter 13 bankruptcy lawyers at Kelley Kaplan & Eller for more information.
Sources:
uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/chapter-13-bankruptcy-basics#:~:text=Background,over%20three%20to%20five%20years
law.cornell.edu/uscode/text/11
