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Yes, Chapter 13 could be Better than Chapter 7


Chapter 13

Yes, Chapter 13 could be Better than Chapter 7

It is no surprise that most people interested in bankruptcy would rather file for Chapter 7 than Chapter 13. They believe this to be best for one primary reason: most or all of their debt will be discharged, without the need for a repayment plan.

While this may be true, here is something to think about: not everybody qualifies for Chapter 7. For this reason, Chapter 13 may be the only option.

Here are several other situations in which Chapter 13 is the better of the two options:

  1. You are behind on a car payment or mortgage. With Chapter 7, you don’t have the ability to make up missed payments over an extended period of time. With Chapter 13, however, the repayment plan will work in your favor. This plan typically lasts three to five years.
  2. You are interested in repaying your debt. While some people have no problem discharging as much debt as possible through Chapter 7, others feel poorly about doing so. They borrowed the money and now they want to pay it back. Chapter 13 makes this possible.
  3. You have nonexempt property that is important to you. A Chapter 7 filing allows you to keep any exempt property. The same does not hold true for the nonexempt property. If you want to keep all your property, Chapter 13 is the better route. With this type of filing, you don’t have to give up anything. How does that sound to you?

There are times when Chapter 7 bankruptcy is the right choice. There are also times when Chapter 13 makes more sense. You have to compare the two and then make an informed decision.

If bankruptcy is on your mind, it is time to compare the pros and cons of both types. This is the only way to know that you are making the right choice. We can help you better understand when Chapter 13 makes more sense than Chapter 7.

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