3 Ways Chapter 13 Helps People Who File Under This Branch
While using Chapter 13 bankruptcy will result in having to make payments to a bankruptcy trustee for up to five years, it can help you regain control of your finances and debts during this time. A lot of people hesitate to use this branch, because of the required repayment plan, but it can offer a lot of financial relief. Here are three ways this repayment plan will help you if you are having major problems with your finances.
You Can Prevent Foreclosure
After missing just a couple of mortgage payments, did you know that your lender could pursue foreclosure on your house? There are a few ways to stop this from happening, including paying all your past due payments, but this is not always possible. Another option is through Chapter 13. When you file under this chapter, it will force your lender from stopping the foreclosure process if already started, and it will prevent your lender from starting the foreclosure process if the lender was preparing to do so. Chapter 13 will give you three to five years to repay the money you owe, and this is one of the top reasons people choose this branch.
It Will Catch You Up on All Your Debts
The repayment plan created for you in Chapter 13 is designed to offer a way for you to pay off all your past-due debts as well as stay on top of your current payments. When you complete the three or five-year program, you will not have past-due debts. In other words, you will be completely caught up on your bills, and this is how you get a fresh start through bankruptcy.
It Offers Protection from Your Creditors
The other top benefit you will experience after filing is relief from your creditors. After filing for Chapter 13, the court will send a letter to every creditor you have. The letter informs the creditors that you filed for Chapter 13 and that they must stop pursuing you for payments. Instead, the trustee will use your payments to pay off the creditors as stated in your repayment plan, and your creditors will receive a copy of this so they know what to expect.
Getting debts discharged through Chapter 7 might appear like a better option, but it is not always the best choice for people. If you are behind on your bills and are tired of being harassed by creditors, Chapter 13 bankruptcy might be the best option for you.
Reach out to a business like Lifeline Legal LLP for more information.