When you file for chapter 13 bankruptcy, it is a crucial decision that you are making. People file for bankruptcy when their financial future is on the line. Most people are scared to file for bankruptcy. These people are afraid of what they might lose and if you can afford it. Having debts is not easy and filing for bankruptcy is not easy as well. However, if you find yourself in this situation the best option for you is to file for bankruptcy. When you are falling behind on your payments to your creditors especially for car loans and mortgage holders then you should consider chapter 13 Bankruptcy. There are many things for you to consider when deciding which chapter of bankruptcy will be suitable for you. You have to consider your earning potential, income and if you are looking to surrender your property, or you want to keep it.
If you are in a position to make the payments, and you still want to keep your property that you should file for Chapter 13 bankruptcy is the best option for you. When you file for chapter 13 bankruptcy then you will be able to establish and suitable payment plan, therefore, allowing you to keep your property. Whether your property is considered nonexempt or exempt then you are still permitted to keep it. Your debts will not be canceled, but they will be reduced when you file for Chapter 13 Bankruptcy.
Chapter 13 is effective for those people who have a regular income. It is important to understand the many advantages of filing for Chapter 13 bankruptcy. One major advantage of filing for bankruptcy is that it will permit you to reduce the amount that you owe on most of your secured debts. Secured debts are the ones that if you are not able to pay, then you will have to return the item it may be a car, furniture, or a house.
Another advantage of filing for Chapter 13 bankruptcy is that you will effectively decrease the interest that you are needed to pay on a secured loan. When you file for a secured loan you are required to pay the secured debts at a prime rate of 1-3{4b8302e4225cb4a76d9ab16402a8d5954cbc95bd06f39adf2ff701078df6964c} depending on your case. Another significance of filing for Chapter 13 bankruptcy is that it allows you to save your property from foreclosure. People can stop foreclosure proceedings and come up with suitable mortgage payment plans over time.
Filing for chapter 13 bankruptcy gives you a chance to reschedule your secured debts and again extend them over the life of your chapter 13plan. When you do this, it may lower the payments. Chapter 13 also has a special provision that is important for protecting the third parties who are liable with the debtor, the provision is necessary for protecting the loan co-signers. It is possible to discharge your second mortgage under chapter 13. Depending on the amount that you have to repay on your first mortgage, then you can be able to discharge your second mortgage under this case.