5 Ways Chapter 13 Bankruptcy Gives You Control


Most Americans don't like the idea of filing for bankruptcy. The idea of liquidating your assets and submitting to the rules necessary to receive protection can seem overwhelming. It can feel like a loss of control. However, Chapter 13 bankruptcy is different. It actually gives you control in a variety of ways. How? Here are a few ways you can regain your life using Chapter 13.

1. You Set the Payment Plan

One of the biggest ways you retain control over your choices is by working out your own payment plan. The bankruptcy court sets some boundaries for this repayment plan, such as that your creditors must receive at least what they would have received from liquidation. However, how you meet these guidelines is largely up to you and must only receive approval by the court. 

2. You Decide What to Reaffirm

It's much easier to keep secured assets, such as your house or cars, in Chapter 13 than in Chapter 7. Unlike Chapter 7, there are provisions to get caught up on debts in arrears. So, while Chapter 7 essentially tells you which assets you can and can't keep, Chapter 13 lets you choose your priorities with certain parameters. 

3. You Receive the Temporary Stay

Many people underestimate the value of a temporary stay. The automatic stay prevents creditors from pursuing any new or ongoing collections efforts. Unless there is reason to waive this stay, it remains in effect for the duration of the bankruptcy — which is years during Chapter 13. This buys time to work out your finances and prepare to manage non-dischargeable debts. 

4. You Choose the Payment Term

Most individual Chapter 13 cases can be repaid over a period of either three or five years. If you want to be done with your bankruptcy, you can opt for the shorter term and pay less in the long run. Want more wiggle room in your monthly payment? Choose the longer term. The right choices are individual, and you can often choose for yourself. 

5. You Can Make Changes

One of the biggest concerns for many is that their situation will change during the lengthy repayment period. If this happens, though, you can petition the court for changes to your terms. If your income goes down, for example, the payment plan may be altered to accommodate it. And if you decide that Chapter 13 isn't working for you, you can often change to Chapter 7. 

Where to Learn More

Clearly, Chapter 13 is designed to provide some flexibility and empower the debtor as much as possible.

Learn more about it by meeting with a Chapter 13 bankruptcy law firm in your state today. 


29 March 2023

Talking About Bankruptcy Proceedings

Hello, my name is Neil Gamford. Welcome to my site about bankruptcy proceedings. After my divorce, I was left near penniless and without a place to stay. I was paying all of my income to alimony and my remaining debts. Although I had a solid payment plan in place, it was getting difficult to cover my financial obligations without a home. Luckily, I met with a bankruptcy attorney, who helped me find a way to discharge my debts and start over. I hope to share the information I learned throughout that process with you through this site. Please feel free to visit anytime.