Should You File For Chapter 13 Bankruptcy Instead?

In some instances, filing for a Chapter 13 bankruptcy makes more financial sense than filing for a Chapter 7. There are many factors that dictate which filing is available to you, but sometimes, you have more than one option. Here are some situations in which a Chapter 13 filing might be best. 

You Want to Repay Your Creditors

If you have a personal desire to repay your creditors instead of having the debts discharged, a Chapter 13 is the best option. The bankruptcy would help protect you from financial consequences from your creditors while you pay off your debts. 

The Chapter 13 would also give you the ability to pay off your debts over time instead of being overwhelmed with payments now. The debts would be restructured and consolidated into a simple monthly payment that you would pay to your bankruptcy trustee. 

Your Home Mortgage or Car Loan Is Behind

If you still owe on your home mortgage or car loan, you could possibly lose them in a Chapter 7 filing. However, if you want to keep your home and car and are behind on the payments, a Chapter 13 could allow you to do so. 

Your bankruptcy attorney can have your mortgage and car loan arrears calculated into your repayment plan so that you can catch up. Not only will you keep your home and car, but you could walk away with a new agreement with your lenders that could reduce the amount of interest you are paying. 

Someone Else Is Also Responsible for Your Debts

A co-signer for loans or other debts you have incurred would still be legally liable for the debts even if you have a Chapter 7 filing. Once you have been cleared of responsibility for the debts, the creditors most likely will go after the co-signer. 

Instead of allowing your creditors to go after someone who was trying to help you by co-signing for your debts, you can file a Chapter 13 and still continue to pay them off. When you make payments through your repayment plan, your co-signer is left unbothered.

Other factors could influence which type of bankruptcy you should file. Talk to your bankruptcy attorney about the best option for your particular situation. Remember, your goal is to get a fresh start in your economic life. To do this, sometimes you have to make decisions, such as filing for a Chapter 13 bankruptcy. For more information, talk to resources like Baxley Law Firm LLC and tell them about your situation. They will further advise you on the next course of action.