Reasons to File a Chapter 13 Bankruptcy

22 Jul Reasons to File a Chapter 13 Bankruptcy

Individuals file Chapter 13 bankruptcy for a variety of reasons. The following are some of the most common ones we hear from clients:
1. You fell behind on your mortgage or car payments and need bankruptcy to catch up.
2. You make more than the median income in your state and do not pass the “means test”.
3. You are not able to pay all of your debts but would like the opportunity to pay part of them back.
4. You are able to pay all of your debts but would like to make one payment every month rather than several and would like a Chapter 13 repayment plan to help you stay organized and achieve your goal of becoming debt-free within reasonable amount of time.
5. You would like the credit reporting benefit of filing a Chapter 13 (which stays on your credit report for 7 years from the date of filing, as opposed to a Chapter 7 which stays on the report for 10 years).
6. You have a second mortgage or home equity line of credit (HELOC) which is “wholly unsecured” (i.e. your property is worth less than you owe on your first mortgage) and would like to make use of the Chapter 13 “lien-stripping” provisions.
7. You have non-exempt property which you want to keep and would like to pay the value of the property over the course of a Chapter 13 repayment plan.
8. You have certain non-dischargeable debts such as recent tax debt which you would like to pay off over time through the use of a Chapter 13 repayment plan.

You can read a bit more about Chapter 13 bankruptcy here and also about choosing between Chapter 7 and Chapter 13 bankruptcy.

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Nicholas Ortiz, Boston Bankruptcy Attorney

From Attorney Ortiz: We have been helping consumers and small businesses in Massachusetts successfully navigate through the bankruptcy process since 2002. We offer free initial consultations and payment plans. Call us at 617-716-0282 to discuss your debt relief options. Mention the Bankruptcy Law Network when you call!
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