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What are the advantages of Chapter 13 bankruptcy?

Washington, DC, residents may accumulate debt through credit card purchases, mortgage and personal loans. Debtors understand that they must pay these debts on a regular basis to avoid high interest rates. However, unexpected life changes, such as death and unemployment, can cause debtors to miss payments, resulting in insurmountable debts. Debtors who are dealing with huge debts search for options that can bring them a fresh financial start. One option available to debtors is filing bankruptcy.

Some people shy away from the topic of bankruptcy because they find it shameful. However, it is important to understand that bankruptcy is a legal option for honest debtors who want to start a new life free from debt. Still, many people refuse to file bankruptcy because they are afraid to lose their homes and other personal belongings.

Fortunately, bankruptcy is not limited to liquidation. Chapter 13, or reorganization bankruptcy, is a viable option for debtors who want to keep assets. This bankruptcy allows debtors to pay a portion of their debts through a repayment plan that lasts for a few years. Additionally, Chapter 13 allows debtors to catch up on delinquent mortgage payments. Once the terms of the bankruptcy have been satisfied, all remaining debts are forgiven.

Readers need to understand that only those who have a stable income are approved for Chapter 13 bankruptcy protection. It is important to take note of the requirements to ensure that they are filing the right kind of bankruptcy protection in court. Once they have filed bankruptcy, debt collectors will stop harassment, allowing debtors to focus on paying their debts.

Legal professionals who handle bankruptcy matters such as Chapter 13 can provide sound legal advice to debtors who speak with professionals to better understand their unique circumstances. Speaking with a knowledgeable professional will also give the debtor peace of mind.

Source: United States Courts, "Individual debt adjustment," Accessed Jan. 29, 2015

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