Chapter 13 bankruptcy also called reorganization bankruptcy or wage earner’s plan is a payment plan that lasts 3 to 5 years. This form of bankruptcy can bring relief from harassment from creditor phone calls and debt collection efforts. Unlike chapter 7 bankruptcy, where the assets of the borrower are sold to repay creditors, a chapter 13 plan allows the applicants to create a flexible repayment plan over 3 to 5 years. Filing for chapter 13 bankruptcy allows the applicant to consolidate all their debts and make a single monthly payment instead of paying creditors every month. Here are some of the major benefits of filing chapter 13 bankruptcy in Hamilton, OH.
Save the Home from Foreclosures
One of the top benefits of filing chapter 13 bankruptcy is that it allows an individual to save their home from foreclosure while temporary working out the details of debt consolidations and payment arrangements. As long as the applicant makes all mortgage payments in a timely manner after filing for bankruptcy, they can keep their property.
Reduce the Amounts of Debts
A chapter 13 plan provides the borrower the opportunity to pay a fraction of their debt. In some cases, the court may allow a payment as small as 10 percent of the unsecured debt. The remaining 90 percent of the debt is wiped clean.
Appearance on Credit Reports
Chapter 13 bankruptcy is shown on a credit report for seven years while a chapter 7 is shown for ten years. This means that creditors will know that a borrower filed for bankruptcy three years longer than a person who filed a chapter 7 plan. The impact on an individual’s credit is much less if a chapter 13 filed. This is essential since lenders use credit reports for common expenses, such as car financing.
Late Fees Stop Accruing
After a borrower files chapter 13 bankruptcy, the late fees on their debts stop accruing. Most chapter 13 bankruptcy plans are set between 2 to 5 years. After the expiry of this period, the collection stops and the remaining debt obligations from the day the bankruptcy was filed are erased.
These are just some of the major reasons to file a chapter 13 bankruptcy in Hamilton, OH. To ensure that the entire bankruptcy process is handled professionally, it is imperative to hire a knowledgeable chapter 13 bankruptcy attorney. For more information about chapter 13 bankruptcy, please visit Domain.