Hi, I am attorney Robert Geller. I am a board certified consumer bankruptcy attorney located in the Tampa Bay area. Today I want to talk to you about why somebody might want to file a chapter 13 bankruptcy instead of a chapter 7 bankruptcy.
The most common reason I file chapter 13 bankruptcies for clients is because they’re behind on their mortgage. Most homeowners prefer chapter 13 because of the protection it offers and the opportunity to catch up on their mortgage if they are behind.
IN many cases, clients come to me after they’ve been out of work for a period of time. Now they’re back to work but the damage is done – they’re six months behind on their mortgage and their mortgage company won’t even talk to them anymore. They won’t even take payments from them now and they’re at a loss for what to do.
So what we do is file chapter 13 for them. This gives them a period of up to five years to catch up on their back payments and/or to seek a mortgage modification to make their payments more affordable.
What are the other reasons for filing chapter 13 instead of chapter 7?
In chapter 13, you can possibly get rid of a second mortgage. You can catch up on your car loan. You might even get out of the loan and only have to pay blue book value for your car. This means you would own your vehicle outright and only have to pay the value of the car, as opposed to the amount of your original loan.
Chapter 13 also lets you catch up on past due court-ordered payments like alimony or child support. Even if you have a motion against you for contempt of court, bankruptcy would stop this. Chapter 13 might also eliminate debts you owe to your ex-spouse that aren’t related to alimony or child support.
Another benefit of chapter 13 is that you can file it within 8 years of a previous bankruptcy.
But perhaps the biggest reason people choose chapter 13 is because it lets them keep all of their assets. Chapter 7 limits what you can keep. Chapter 13 lets you keep everything, you just need to commit to a payment plan.
I am attorney Robert Geller and I’m a board certified consumer bankruptcy attorney in the state of Florida. I want to help you build a bridge to a brighter future. If you have any questions, feel free to call us or message us on Facebook.