Chapter 13 Bankruptcy

Chapter 13 Bankruptcy

chapter 13 bankruptcy
Chapter 13 Bankruptcy in Charleston SC.

Bankruptcy is a major challenge for families, particularly to try to prevent themselves from becoming homeless in the midst of the proceedings. There are a variety of ways to declare bankruptcy and each has their own unique advantages and disadvantages. This article will examine Chapter 13 bankruptcy court proceedings and highlight a few specific benefits of a Chapter 13 bankruptcy as well as some drawbacks.

Chapter 13 bankruptcy helps debtors build a repayment plan for all of their creditors managed by a trustee. This plan is made for a specific period of time and then at the end of the plan the debts should be actively paid again. This plan creates a quasi-consolidation of many forms of debt and acts as a reset button if the debtor sticks to the plan. Chapter 13 bankruptcy may work if you have a lot of credit card debt or medical bills, but will not do anything to help a homeowner who is behind on mortgage payments.

The benefits of a Chapter 13 bankruptcy are that the affected parties can keep all of their assets temporarily and prevent the foreclosure process for a very short period of time. This is really important for families who are struggling with mortgage payments and need an extra few weeks to get all the payments caught back up with the bank. So, you’ll have to ask if you will have all the money for interest, principal, taxes, insurance, attorneys’ fees and foreclosure court costs in the next few weeks? Chapter 13 bankruptcies also allow for loan signers to be protected from collection actions being taken for a short period of time while the bankruptcy is in motion. Debtors in a chapter 13 bankruptcy only have to deal with a trustee instead of dealing with each of their creditors individually which creates less stress for people who may be dealing with a variety of collection calls. However, you will also have a new creditor- a bankruptcy attorney who you will have to pay by the hour.

Chapter 13 bankruptcies do not help with student loan debt, which is becoming an increasingly major problem. Chapter 13 bankruptcies also take a long time to settle because of the repayment plan and one’s life has to be regimented in order to afford the monthly payments to the trustee. Debtors cannot add more debt without talking to their trustee and have some hoops to jump through in order to get the discharge at the end of the repayment plan. Chapter 13 also does not necessarily deal with all types of unsecured debt, so you may have another set of payments to negotiate while dealing with the stringent payment plan of the Chapter 13 bankruptcy.

Chapter 13 is the preferred option of bankruptcy if you only need a few weeks, since your mortgage lender will get a stay from bankruptcy and proceed with the foreclosure anyway- all while adding interest, court costs, and foreclosure fees. Chapter 13 helps debtors get their finances in order through a managed repayment plan for creditors, but it really isn’t going to save a house in the process unfortunately. This can temporarily make the collection calls stop, but your house will still be sold. With the other debts, debtors will have to make adjustments to their lives in order to manage the repayment plan and continue making the payments for all the unsecured credit.

Before you consider chapter 13 bankruptcy, please call Charleston SC Home Buyers. Why ruin your credit for a large portion of your life- more than ten years! Our organization helps many people in difficult financial situations get cash for their home to help them pay off creditors. If you find yourself unable to afford your bills, please contact us on our website or call (843)553-5005 and a representative will be happy to assist you in assessing your situation and buying your home.

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