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Reasons For Chapter 13 Bankruptcy

Chapter 13 Bankruptcy Lawyer

Filing for Chapter 13 bankruptcy can be a viable solution for individuals facing financial challenges and seeking a structured approach to repay their debts. It offers a valuable tool for individuals seeking debt relief and a structured approach to repay their obligations. By addressing foreclosure, managing tax debts, creating a repayment plan, protecting assets, and receiving relief from creditor actions, Chapter 13 bankruptcy provides a pathway towards financial stability. With proper legal guidance, such as a lawyer at Therman Law Offices, LTD, and diligent adherence to the repayment plan, individuals can regain control of their finances and work towards a brighter financial future. A dedicated Chapter 13 bankruptcy lawyer will help you understand all of your avenues and options in front of you so that no stone is left unturned. Additionally, an educated lawyer with a proven track record will protect you throughout the process and make sure you are crafting your financial plan for the best future possible. In the meantime, here are five common reasons why someone might need to file for Chapter 13 bankruptcy.

Avoiding Foreclosure

One significant reason to file for Chapter 13 bankruptcy is to halt foreclosure proceedings and protect your home. By filing, an automatic stay is initiated, which temporarily stops foreclosure actions. Chapter 13 allows you to catch up on missed mortgage payments through a repayment plan while maintaining regular monthly mortgage payments. This can provide an opportunity to save your home and avoid foreclosure.

Repaying Overdue Taxes

Chapter 13 bankruptcy can be used to address overdue tax obligations. While some tax debts are nondischargeable, filing for Chapter 13 bankruptcy allows you to develop a manageable repayment plan over three to five years. This gives you the opportunity to catch up on outstanding tax debts and prevent aggressive collection actions, such as wage garnishment or bank levies.

Managing Debts and Creating a Repayment Plan

If you have a steady income but are struggling to meet your financial obligations, Chapter 13 bankruptcy offers an organized and manageable way to repay your debts. Through a repayment plan approved by the court, you can consolidate and restructure your debts, making affordable monthly payments over a fixed period. This provides a structured approach to gradually eliminate your debts while maintaining essential living expenses.

Protecting Non-Exempt Assets

Chapter 13 bankruptcy allows individuals to retain their non-exempt assets while repaying their debts. Unlike Chapter 7 bankruptcy, which involves liquidating non-exempt assets to satisfy creditors, Chapter 13 enables you to retain ownership of valuable assets like your home or a significant vehicle. By adhering to the repayment plan, you can protect your assets from being seized or sold.

Receiving Relief from Creditor Actions

Filing for Chapter 13 bankruptcy triggers an automatic stay, halting creditor collection actions such as lawsuits, wage garnishments, and harassing phone calls. This provides immediate relief from the stress and pressure of dealing with aggressive creditors. The automatic stay gives you the opportunity to regain control of your finances and work towards a more stable financial future.