Some Advantages of Chapter 13 Bankruptcy Cases

While Chapter 7 might be the more “popular” way to file for bankruptcy relief there are several advantages of Chapter 13 bankruptcy.  One reason people file for Chapter 13 bankruptcy is because they  make too much money to qualify for Chapter 7.  However, there are many more reasons to file for bankruptcy protection under Chapter 13.  Some of the advantages of Chapter 13 bankruptcy include:

1. You can save your home and bring your mortgage current. If you are behind on your mortgage you can use the 3-5 year payment plan to catch up your missed payments and pay them back over a reasonable period of time.
2. Lien stripping. If you have multiple mortgages on your home and your residence is worth less than what you owe on your first mortgage, you have the ability to strip the additional mortgages.  When these liens are “stripped” the amount owed is treated like credit cards and medical bills.
3. Cramdown your auto loan. If your automobile loan is older than 910 days and you owe more on the auto loan than what your vehicle is worth, you can cramdown the secured portion of the loan to the actual value of the vehicle.  The amount owed over and above the vehicle’s worth will be treated like credit cards and medical bills.

Are you looking to file chapter 13 bankruptcy? Let me know in the comments!