Chapter 13 Bankruptcy
Chapter 13 Bankruptcy is the more complicated form of consumer bankruptcy. In a Chapter 13 Bankruptcy a Debtor reorganizes their debts. It is most commonly used by people who want to stop a foreclosure on their home to give them time to try to work out a payment plan. Chapter 13 Bankruptcy has many benefits for Debtors, including:
- Forcing creditors to temporarily stop all debt collection activities.
- It is a reorganization bankruptcy, it allows time for a restructuring of debts, and negotiation of home loan modification.
- Mortgage arrears and other debts are paid over a number of years instead of in a lump sum.
- It creates an automatic stay against foreclosures, repossessions, and wage attachments.
- It may also allow you to eliminate second and third mortgages
- After a short time, your credit score will likely increase.