Top 5 Reasons Chapter 13 may be a better option than Chapter 7
Although Chapter 7 is a more common type of bankruptcy to be filed, many debtors choose to file for protection under Chapter 13. Chapter 13 allows debtors to reorganize their debt, and therefore they have a monthly payment due to a bankruptcy Trustee who distributes the payments to creditors.
Chapter 13 can be a great tool to get your debt under control, especially if one or more of the following factors applies to you:
 1)     You have filed a prior chapter 7 case and received a discharge in the prior 8 years.
If this is the case, you would not be able to file another chapter 7 and receive a discharge. Therefore, if you find yourself in trouble with debt within 8 years from a prior chapter 7, your only bankruptcy option would be chapter 13. Remember, in chapter 13 you still benefit from the same automatic stay that applies in chapter 7 and you can put a stop to all collection action immediately.
2)Â Â Â Â Â You owe the IRS or a State income tax debt
A good way to deal with tax debt problems can be with chapter 13. You can get the IRS or any other taxing agency off your back and pay them back on your terms with a Chapter 13 plan. Even better, you can pay the actual tax debt amount, and discharge the penalty portions.
3)Â Â Â Â Â You have a high interest car loan, or are behind on your car payments but need to keep your car
Since you can reorganize your debt in chapter 13, many people file to restructure a bad car loan, or catch up on a car loan they fell behind on. In many cases you may be able to lower your car loan significantly with a chapter 13 and keep your car.
4)Â Â Â Â Â You have fallen behind on your mortgage and want to keep your home
A chapter 13 allows a homeowner who is in default on their mortgage to catch up over a period of 3-5 years. You can even save a home from the brink of foreclosure by filing a chapter 13.
5)     Your Driver’s License is Suspended and you need to get it back ASAP:
If your driver’s license is suspended for non payment of tickets, etc. filing a chapter 13 bankruptcy would allow you to get your license reinstated. Also, unlike chapter 7, you can discharge (erase) any non-criminal traffic, or other non-criminal fines. This can be an enormous benefit of Chapter 13 if you have tickets, or other non criminal fines hanging over your head.
These are just a few benefits that Chapter 13 bankruptcy can provide. To see if Chapter 13 or Chapter 7 may help you in your debt situation, call us today for a free consultation.
