Why file Chapter 13 bankruptcy?

When people think of filing bankruptcy most people think of filing Chapter 7. Most people don’t know that Chapter 13 bankruptcy when used properly has extreme amounts of power for debt elimination. One reason many individuals in financial trouble try to avoid filing bankruptcy is because they feel obligated to pay their debts back. There is a stigma that makes Americans feel guilty about filing Chapter 7 bankruptcy, because in a Chapter 7 the debts are completely wiped out. In a Chapter 13 bankruptcy, the debtor, along with their bankruptcy attorney, has to submit a feasible repayment plan that will last 3 to 5 years. This gives the individual filing for bankruptcy an opportunity to at least pay back a portion of the debts that they owed. This also helps with the individual’s credit, because creditors appreciate the individual’s attempt to make it right.

Chapter 13 bankruptcy has many benefits with the biggest being the ability to protect the debtor’s property. Rarely does the debtor lose any property in a Chapter 13 unless they choose to because they can’t afford it. This type of bankruptcy filing allows the debtor to get caught up on back payments on their mortgage while being able to keep the family home. Just as in filing bankruptcy under Chapter 7, a Chapter 13 Chapter shares the power of the automatic stay. The automatic stay will stay in place until the bankruptcy discharge at the end of the Chapter 13 repayment plan. If a creditor has something to say to the debtor, they will have to contact the bankruptcy attorney.

One less thought of benefit of a Chapter 13 bankruptcy is flexibility. When Chapter 13 was created, Congress understood that 3 to 5 years is a long time to be obligated to a set in stone payment plan. If the debtor loses his job or suffers medical problems, all they will have to do is contact their bankruptcy attorney and file a motion to change the plan. Depending on the circumstance, the changes to the bankruptcy plan might be temporary or could even become permanent if necessary. This flexibility allows the individual filing for bankruptcy to feel the freedom to make changes as necessary. The bankruptcy court is understanding and wants the debtor to be a success and get a bankruptcy discharge.


Getting answers to those tough bankruptcy questions needs to be thought of before you make a decision when it comes to your financial problems. Finding the answers to help you understand your situation more clearly can help you make an informed decision about filing bankruptcy. Take a minute to call or fill out the form to have a FREE NO OBLIGATION CONSULTATION with a bankruptcy attorney in your area.