A lot of people don’t know that there is more than one type of bankruptcy. When most people think of bankruptcy, they are thinking of Chapter 7 bankruptcy in Gilbert, which eliminate unsecured debts like credit cards if you qualify. This is the “clean slate” option that most people have in mind when they think of bankruptcy.
Chapter 13 is another bankruptcy option for those who can’t qualify for Chapter 7 Gilbert bankruptcy or who own a lot of equity in their home or other personal assets. There are a lot of ways that Chapter 13 bankruptcy can help you. Here are just four:
Create Affordable Payments
You may owe money to multiple creditors, adding up to huge payments every month. You may be able to pay some of them, but not all of them. So you either choose which ones you want to pay one month and add up interest and fees on the other, or you underpay all of them and incur interest and fees across your accounts.
When you file for Chapter 13 bankruptcy in Gilbert, your bankruptcy lawyer helps you to negotiate a repayment plan that consolidates your debts into one monthly payment. The payment is determined based on your ability to pay, so it is much more manageable. You can also count on the payment remaining fixed over the course of the repayment plan.
Put a Cap on Payments
When you owe a creditor, the interest and fees just keep adding up until you have completely paid off the debt – even if it takes you 10 or 20 years to pay it off. However, when you pay under a Chapter 13 restructuring plan, you only pay for three to five years. At the end of the repayment plan, you are done with those debts for good.
Entering into a Chapter 13 repayment plan puts an end in sight. You don’t have to toil under debt for years without knowing when it will end.
Eliminate Some Debts
At the end of your debt repayment plan under a Chapter 13 bankruptcy filing, those debts can be eliminated. Certain debts, like your house or car loan, will need to continue to be paid so that you can continue to keep those items. However, others, like credit cards and medical bills can be discharged at the end of the repayment term. The courts just want to ensure that you have paid what you have been deemed able to pay.
Avoid Foreclosure and Repossession
By the time many people turn to bankruptcy, they are often facing serious consequences, such as the foreclosure of their home or the repossession of their vehicle. Filing for Chapter 13 bankruptcy may be able to help you avoid foreclosure or repossession.
The repayment plan under a Chapter 13 bankruptcy can be designed to bring you current on your payments for your home or your car. Filing for Gilbert bankruptcy will be a halt to collection procedures, including foreclosure or repossession. The repayment plan can help you get caught up, and it can help you free up money that was going toward other debts so that paying your mortgage or car loan is not so difficult.
There are a lot of benefits to filing for Chapter 13 Gilbert bankruptcy. It may not be the “clean slate” that many people think a Chapter 7 filing is, but it can help you dig yourself out from overwhelming debt. You can finally put an end to harassing calls from creditors, and you can get a steady handle on your finances. By the time the repayment period is over, you should have a much stronger and healthier financial picture.
Call Gilbert Bankruptcy Lawyers today if you are struggling with debt. We’ll help you learn more about bankruptcy and whether it might be the right option for you. Our bankruptcy lawyers represent personal and business clients, and they are ready to help you get debt relief as quickly as possible. Call us today to talk with a bankruptcy attorney about your unique financial circumstances and what your options might be. We’ll help you decide on the best course of action to meet your goals by explaining your legal rights and options.
Gilbert Bankruptcy Lawyers