By K. Brevig

Chapter 13 is the form of bankruptcy which more people are eligible to qualify for. It differs from Chapter 7 bankruptcy in that to file for Chapter 7, you must make at or below a specific amount of income, and in Chapter 7 most of your debts are discharged. Chapter 13 also has the requirement of making a certain amount of money, and Chapter 13 is treated more as a debt repayment plan, while Chapter 7 simply erases most of your debt.

Chapter 13 gives the person filing bankruptcy a chance to get back on track financially without having to deal with the harassment of creditors, and also without having to pay interest on what they already owe. The courts will go through your debt, consolidate it, and legally protect you from any harassment while you pay a pre-determined amount each month to pay off your debt. Many people are often forced to choose Chapter 13, even though it does not erase all debt, since Chapter 7 bankruptcy requires so many different qualifications. These qualifications are available online, or can also be described by you to a lawyer, who is more knowledgable about the ins and outs of the process.

However, Chapter 13 has some definite benefits, and some that even trump Chapter 7 in my opinion. First off, it is not quite so detrimental to your credit. Instead of having to have all of your debts erased, you are instead allowed to pay them off slowly (and without interest), which elevates you in the eyes of the credit companies more than Chapter 7 would. Chapter 13 also allows you to keep most of your assets, such as your house, your car, and other living essentials. However, in Chapter 7, youre much more likely to lose a lot of your assets in order to pay off what debt you can before the courts officially erase it. Therefore, if you chose Chapter 13 (whether you are eligible for Chapter 7 or not), there may be some extra benefits in there for you if you do.

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So to recap, Chapter 13 has two major benefits for someone who chooses to file it: You can keep your assets, which would not be allowed in Chapter 7, and you are allowed an interest free, consolidated payment plan that is tailored to you, and also keeps your credit from being damaged as much as in Chapter 7 bankruptcy. As long as you can keep a steady job, paying back Chapter 13 bankruptcy should not be problematic.

To choose which kind of bankruptcy is right for you may require the help of a lawyer. While you can certainly look up the qualifications online, some of them, especially for Chapter 13, can be incredibly nuanced and hard to understand fully. Consulting with a lawyer may provide further insight, and help you to make much smarter financial decisions. Remember to always be very careful when you are considering any kind of bankruptcy. No matter what kind you choose, there will be lasting ramifications in your life, whether financial or otherwise. Therefore, it is very important to think long and hard about this decision, and get all the help and information possible before deciding what to do.

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