The Benefits of Filing for Chapter 13 | Tacoma Bankruptcy Attorney
When it comes time to file for Washington bankruptcy, most people find themselves considering either Chapter 7 or Chapter 13. While both offer a path to financial freedom for those eligible, there are key differences between the two. In this blog post, we’ll be discussing the benefits of filing for Chapter 13.
Qualifications Needed to File for Chapter 13
Chapter 13 is also known as a “debt adjustment.” Unlike Chapter 7, Chapter 13 requires you to pay back debts over the course of a few years.
It’s important to keep in mind that you must have the financial means to pay back your creditors. This allows people with a stable income to keep their assets. It can also significantly help towards establishing long-term financial health.
Chapter 13 Provides Asset Protection
One of the benefits of Chapter 13 is that it allows you to keep your property and assets, e.g. your vehicle and home. This is provided that you continue to make regular payments over time. If you have past due payments on your mortgage, you are required to pay them back. The payments will then broken up into smaller amounts and paid back over the life of the bankruptcy.
With a vehicle payment, Chapter 13 lowers the total amount of the loan to match the actual value of the car. To to be eligible, the vehicle has to have been purchased at least 910 days (2.5 years) prior to the date of the Chapter 13 filing.
As the debtor, you can dictate terms of repayment to the mortgage company, thereby giving some leeway in repayments. In some situations, you may be able to persuade your lender to modify your mortgage to your terms.
Another reason to opt for Chapter 13 is that it only stays on your credit report for seven years compared to ten years with Chapter 7. This will help you get back on your feet quickly financially. Credit reports are needed for a variety of qualifications, including car loans, renting a house/apartment and even some jobs.
No Direct Contact with Creditors
Under Chapter 13, all debt collection efforts must stop. This means the debt collectors won’t be calling and bugging you or family members at all hours of the day. The trustee handles all payments to the creditors.
Chapter 13 Bankruptcy Attorney in Tacoma
If you have more questions about filing Chapter 13, give us a call at 253-272-4777 to schedule a free consultation. Our compassionate and skilled Washington bankruptcy attorneys at Law Offices of David Smith will help you navigate through the confusing and complex bankruptcy process. We can review your unique situation to determine if Chapter 13 bankruptcy is the best option for you and your family.