If you’re drowning in debt and considering filing for bankruptcy to get to the other side, know that it is a step in the right direction. The next step is deciding on the Chapter best suited to your specific situation that will provide you with the most benefits.
Keep reading to learn more about the main reasons why people choose Chapter 13 to handle their debts before hiring a Chapter 13 attorney in San Diego.
Why do people choose Chapter 13?
If you decided to file for bankruptcy, you must have a lot of questions, such as what type of debt you’ll be able to get discharged and which steps you’ll need to take to file successfully. However, one of the most important questions is about which Chapter to go with, and knowing why people choose it will help you make the right decision. Here are the most common reasons people file Chapter 13:
You get a chance to catch up on your payments
Chapter 13 lets you restructure your debts through a repayment plan and repay most of them on your own terms. It’s a way to gain more time and cover the debts you’re able to pay in installments. After the plan is complete, typically three to five years, the remainder of your dischargeable debt will be eliminated.
It stops collection activities
Once you file for bankruptcy, an automatic stay comes into effect. This stops your creditors from collecting through the course of your bankruptcy case which can last up to five years. It stops repossession, foreclosure, and garnishments.
You can keep your assets
Exemption laws are on your side and let you keep the qualifying property. Also, while filing for Chapter 7 may require you to give up some of your assets, Chapter 13 gives you a chance to keep even the nonexempt assets while keeping up with agreed-upon monthly payments.
You’re not eligible for Chapter 7
While Chapter 7 may be a good option for you, you may not pass the means test, which is necessary to be able to file. For example, if your income exceeds the median income, you will not qualify. On the other hand, the means test in Chapter 13 is used to calculate the amount of disposable income you have and how much you’ll need to pay to your unsecured creditors.
It gets rid of debts non-dischargeable in other Chapters
There are certain debts that cannot be discharged through Chapter 7 but can be if you file Chapter 13. These include the remaining debts from a previous bankruptcy, some penalties and fines, certain unpaid fees, retirement account loans, and many others.
It may be better for your credit report
Whereas Chapter 7 bankruptcy remains on your credit report for up to ten years, if you file for Chapter 13, it will be removed from it after seven years. For some people, this is one of the main reasons they would go with Chapter 13.
Which reputable Chapter 13 attorney should you hire in San Diego?
Whether you want to file for Chapter 13 or first need help deciding which Chapter to choose, you can rely on the expertise of our experienced team at Bankruptcy Law Offices of Mark L. Miller in San Diego. Our skilled and knowledgeable lawyers can provide you with the necessary information, support, and professional legal representation from the first consultation through the bankruptcy proceedings.
Take the first step toward handling your debts and regaining financial independence by getting in touch with us. Feel free to reach out today and schedule a free initial consultation!