The Advantages of the Chapter 13 Bankruptcy

By: Alton Brown | Posted: 15th March 2011


The bankruptcy laws are complicated because there are many exceptions to the procedures. For example, the exempt assets can vary from state to state. If you live in Texas, it is important that you retain a bankruptcy attorney familiar with state laws and how they mesh with federal bankruptcy laws.

When you do retain a bankruptcy attorney in Tyler, TX one of the topics that will come up is whether you should file a Chapter 7 or a Chapter 13 bankruptcy. Many people are familiar with the Chapter 7 because they qualify for the elimination of most debts. On the other hand, under the Chapter 13 bankruptcy you will make payments to a trustee and either pay off debts or catch up delinquent payments.

Why would anyone choose a Chapter 13 bankruptcy? Why would you choose to pay off debts you are having trouble paying now?

Not Starting Over…Starting Fresh

Sometimes people have circumstances in their lives that cause them to fall behind in their payments. They also take on too much debt and simply need help getting the debt payments lowered in some way so it is more affordable. They don’t want the debt written off and would prefer to pay it off but need the creditors to work with them and come to some agreement. That is where the Chapter 13 enters the picture.

The attorney in Tyler, TX can explain the advantages of the Chapter 13 bankruptcy in detail. They can be summarized as follows:

> You get an automatic stay that stops debt collection activity directed at you

> Most types of debt can be included in the payment plan including the mortgage and child support arrears

> You can propose to repay a creditor at a lower interest rate on most loans except for the mortgage

> You may not have to repay the entire debt if able to negotiate a revised payback plan

> All dischargeable debts will be eliminated at the end of the bankruptcy period which lasts for up to 5 years

> All or most of the payments made on unsecured debt will be applied to principle

From the perspective of some people the Chapter 13 bankruptcy is better for both the creditor and the debtor. The debt is not simply eliminated and the creditor gets payments for up to 5 years. The debtor repays some or all of his or her financial obligations.

Your Interests are Represented

Your bankruptcy attorney in Tyler, TX will work with you to prepare a suggested bankruptcy plan. The plan calculates your estimated future income and expenses. If the court approves your plan, you will then make regular monthly plan payments to the court appointed trustee. The trustee then distributes the payments as agreed to in the Chapter 13 bankruptcy plan.

When you are thinking about filing bankruptcy the first step to take is to consult with a bankruptcy attorney in Tyler, TX. The attorney will represent your interests in court and during negotiations.

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Tags: exceptions, chapter 13 bankruptcy, creditor, interest rate, creditors, unsecured debt, trustee, state laws, debt payments, debt collection, payback, chapter 7, exempt assets, bankruptcy attorney