The Advantages of Chapter 13 Bankruptcy
Posted on October 30, 2009
Filed Under Foreclosed home |
Chapter 13 bankruptcy is often their best option for debtors who decide to stop collection efforts from their creditors but still want to repay their debts. People who have fallen behind in their mortgage payments often choose this option because it allows them a chance to “catch up” before their home is foreclosed upon. Filing for Chapter 13 will stop the collection efforts of all the creditors that the debtor lists on the petition and it allows them a variety of options for repayment, if they meet the eligibility requirements.
Foreclosures are the biggest reason that most people choose Chapter 13 bankruptcy rather than the more attractive Chapter 7. With Chapter 13, homeowners who face foreclosure proceedings can halt the legal actions by choosing this bankruptcy option.
A court appointed bankruptcy trustee will act on the behalf of the homeowner to make provisions with the mortgage company. The homeowner is then allowed to make their monthly mortgage payments with an extra amount each month until they have caught up on their delinquent payments.
Another thing that Chapter 13 bankruptcy affords to debtors is the opportunity to repay secured debts over a period. Oftentimes, the payment plans reduce the amount of the monthly payment that the debtor was paying. While Chapter 7 is the most popular option in bankruptcy, many people choose Chapter 13 because they feel a moral obligation to repay their debts.
This type of bankruptcy gives them the help that they need to negotiate with their creditors. It also provides some “wiggle room” for repaying debts with a timely schedule. Psychologically, this form of bankruptcy is less detrimental to people’s self-images because they have fulfilled their financial obligations rather than simply having them completely discharged.
Chapter 13 bankruptcy is similar to entering into a debt consolidation loan, which is often an option many people exhaust before having their debts discharged by courts. Both instances involve the debtor giving the monthly payment to an appointed trustee. The trustee then relegates the payments to the creditors according to the agreement.
For purposes of getting a mortgage, many companies view both of these equally. In other words, a debt consolidation loan is the same thing as filing for Chapter 13 bankruptcy in the eyes of many mortgage companies. One advantage of these options is that the debtor does not need to have direct contact with the creditors who can have a significant negative impact on a person’s self-esteem.
Many debtors might choose to file under Chapter 13 bankruptcy because they have loans that required co-signers. With this type of bankruptcy, the third parties are protected from the creditors. This means that the creditors can no longer pursue either party in an attempt to collect the debt. They must deal with the trustee that the court appointed to the particular case if they have any questions or concerns.
Bankruptcy was designed to offer consumers a fresh start after getting into a tough financial situation. Some people, however, prefer to repay their debts due to financial reasons or moral obligations. For these people, the courts offer Chapter 13 bankruptcy as a viable option.
Not only does it require the creditors to stop contacting the debtor, it also protects homes from foreclosures and third parties from legal recourse. Chapter 13 has several advantages for those who are trying to honestly fulfill their obligations.
MIKE SELVON
http://www.articlesbase.com/law-articles/the-advantages-of-chapter-13-bankruptcy-140161.html
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4 Responses to “The Advantages of Chapter 13 Bankruptcy”
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Auto Loan- Chapter 7 Bankruptcy discharged 1 week ago?
I had filed for Chapter 7 Bankruptcy which was discharged 1 week ago. My immediate requirement is to purchase /lease an automobile. Can someone eceommed some companies who will finance me in this situation. I have been told that not too many dealers offer programs for indiciudlas like myself and the ones that do, take a great advantage of situation by offering high ionterets rates and no additional discounts .
as far as i know, there are plenty of companies like this. google this and then call around to dealerships asking this
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Lots of people think that once they’ve filed for bankruptcy they will be unable to ever get a loan again, and ultimately they are unable to do anything financial ever again. This isn’t always true, there are<!–always ways to improve your financial standing, and there are also ways to repair your damaged credit rating.
http://best-loans.awardspace.com/Bankruptcy.htm
In fact one of the best ways to improve your credit rating is to refinance your home mortgage, this–>will help to improve your credit history in a number of different ways.
References :
Congratulations on your bankruptcy discharge. There are several companies who are willing to finance a car for you.
I would advise you to contact your attorney to see if he has a recommended list of companies. As a part of my services for my clients, my office does follow up with clients to make sure their credit reports have no inaccuracies reported and to make sure the client is making good financial decisions. Your bankruptcy attorney may also have a program such as this.
In the meantime, I would also advise you to contact several car dealers in your area. Do not allow them to pull your credit report right away, simply tell them what you are trying to accomplish. A good finance manager will know his sources and know the criteria that you have to meet.
A few companies that are bankruptcy friendly:
Drive Financial: http://www.drivefinancial.com
Road Loans: http://www.roadloans.com
References :
I’m a bankruptcy attorney