If you are drowning in debt, it might seem like there is no way out. You might have final notices collecting in your mail, creditors calling — and even showing up at your door – to add to your stress. While owing large amounts of money can be crippling, fortunately, there is a solution – Chapter 13 bankruptcy.

Chapter 13 bankruptcy allows individuals to repay all or part of their debt through a payment plan. According to the U.S. Courts, when you file Chapter 13, you are requesting to pay back your creditors in installments within three to five years, depending on your monthly income.

If Chapter 13 bankruptcy sounds like an option that can help you resolve your financial situation, read below to learn more about some of the benefits of Chapter 13 bankruptcy.

Benefits of Chapter 13 Bankruptcy Versus Chapter 7

One of the biggest questions you might have when filing bankruptcy is if you should seek Chapter 13 or Chapter 7. The biggest difference between the two is that in Chapter 13, you repay your creditors, which will allow you to keep your property (and avoid foreclosure). Of course, this is dependent on you making your scheduled payments to resolve the debt. In Chapter 7, your assets may be sold off to repay your debt, and you may lose your property.

While being able to keep your home may be the biggest advantage to filing Chapter 13, there are also other benefits:

  • You can also reschedule secured debts and extend them throughout your Chapter 13 payment plan. This can help you lower your monthly payments.
  • When paying back your creditors, you make the payments to a Chapter 13 trustee. This person then distributes the money to your creditors – meaning you can pay off your debt without having to contact each creditor.
  • Chapter 13 also protects any co-signers you may have on your loans.

If you’re uncertain if you should file Chapter 13 or Chapter 7, ask your bankruptcy lawyer for advice. Your attorney will be able to go through the pros and cons of each and help you make the best selection based on your situation.

Who’s Eligible for Chapter 13?

Unfortunately, Chapter 13 is not available to everyone.

It may be an option for individuals who meet several general requirements. To qualify, your unsecured debts must be less than $394,725, and your secured debts need to be less than $1,184,200, according to the U.S. Courts. You should also be able to prove what current income you have coming in, and the source of the income. Self-employed individuals may seek Chapter 13, but corporations and partnerships are not eligible.

According to the U.S. Courts, you also must meet these mandates:

  • You cannot have had a prior bankruptcy petition dismissed due to your willful failure to appear before the court or comply with court orders.
  • You must receive credit counseling from an approved credit counseling agency within 180 days of filing. You may be eligible for an exception to this mandate if the bankruptcy administrator determines there are insufficient approved agencies near you to provide counseling.

If you meet these requirements and are interested in pursuing Chapter 13 bankruptcy, reach out to a qualified bankruptcy lawyer to start the process.

Find a Chapter 13 Bankruptcy Lawyer Near You

If you are facing a large debt, contact an experienced Chapter 13v bankruptcy lawyer near you to determine if Chapter 13 bankruptcy is the right option for you. Let our lawyers in South Oklahoma City help you re-organize your finances and put an end to harassment from creditors. Don’t let debt ruin your life. Call (405) 529-9377 for a free case review.

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