Why do people file Chapter 13 Bankruptcy?
Most people file a chapter 13 to obtain bankruptcy court permission to get more time to catch up on past due payments that are owed to the lender of their home mortgage. Some people also use a chapter 13 bankruptcy to catch up on past due payments owed to their bank or finance company for their car or other vehicle loan. The time most people are allowed to take to repay the past due amounts owed to their creditors are either 36 or 60 months.
Being behind on your home mortgage payment or car payment can be scary, but if you have regular monthly income, and all your debts, both secured and unsecured are less than the debt cap for chapter 13, you are generally eligible to file a chapter 13 and your attorney will further review all the requirements with you to give your case the best opportunity for a successful outcome.
Other people file a chapter 13 because they make too much money to file a chapter 7 bankruptcy, and chapter 13 is an alternative for them to obtain the protection of the automatic stay from the bankruptcy court, which means that their creditors are not allowed to continue to enforce the collection of any debts that are owed, without first obtaining court permission. And some people file a chapter 13 to stop a foreclosure and ask permission from the bankruptcy court to have time to sell their house.
Whatever reason someone has for filing a chapter 13, usually the end goal is to obtain a discharge of all their debts at the end of the case. Most, but not all types of debts are dischargeable, so make sure to speak with an experienced bankruptcy attorney to confirm that filing a chapter 13 will be worth your while. If you are considering a bankruptcy and have questions regarding your circumstances, reach out to us today to schedule a time to speak.
Contact us at 508-655-3013 or through our website at ravosalaw.com.