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Is chapter 13 bankruptcy the right option for you?

If you are dealing with financial challenges in Washington, D.C., chapter 13 bankruptcy is one of several options that may be available to you and others. Depending on your situation, one option may be better suited for you than others. Therefore, it is important for you to understand the benefits and issues involved with chapter 13 bankruptcy in order to determine if that is the right debt relief option for you.

Chapter 13 bankruptcy is often referred to as a wage earner’s plan because through this filing you will develop a repayment plan for your debts. Thus, this option may not be suited for you if you are unwilling or unable to pay back your debts. Through a chapter 13 repayment plan, you will have to make regular payments for between three and five years.

Sometimes, your biggest financial issues may be related to your mortgage or your car loan. In situations when you do not want to walk away for these assets, chapter 13 bankruptcy may offer you the ability to get caught up. The U.S. Courts points out that filing for chapter 13 bankruptcy will stop foreclosure proceedings on your home. If you are able to include your arrears in your repayment plan, you may be able to cure your delinquencies and keep your home or vehicle.

Other bankruptcy and debt relief options, including filing for chapter 7, may not be a viable choice in cases when you have a co-debtor on a personal loan. This is because through a chapter 7 discharge, for example, you may be relieved of your liability for the debt. However, your co-debtor may still be on the hook. Consequently, your creditor may cease collection efforts against you, but continue going after your co-debtor.

Through other bankruptcy options, you may be required to liquidate certain assets. However, this is not the case with chapter 13 bankruptcy. Therefore, if you have nonexempt property that you want to keep, chapter 13 may be the better option for your circumstances.

This post has provided an overview of how to decide if chapter 13 bankruptcy is right for you. Since each case is unique, however, you should take this as general information and not consider it as legal advice.

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