Thompson Law Group, P.C.

How can a Chapter 13 bankruptcy filing benefit me?

Debtors in Warrendale and throughout Pennsylvania should know that bankruptcy can help achieve financial freedom. There are several options available, and those who are hoping to save their home, automobile and other possessions can think about a strategy to restructure debt using Chapter 13 bankruptcy. A common question that they might ask, however, is how the Chapter 13 will benefit them. The quick answer is in several ways.

For people who choose Chapter 13, instead of Chapter 7 or some other option, is it allows them to keep their home out of foreclosure. If there is a foreclosure proceeding underway, it can stop with a Chapter 13 filing. It can also clear any delinquent mortgage payments over time. It is important to note that the debtor must make the mortgage payments as they are due while the Chapter 13 is in progress. These must also be made on time.

Chapter 13 is also beneficial because, apart from the mortgage on the primary residence, it lets the debtor reschedule scheduled debts. These will subsequently be extended over the life of the Chapter 13, whether it is a three or five-year plan. This might succeed in reducing the payments. There is a provision in Chapter 13 that accords protection to a third party who might be liable for the debtor's consumer debts. A co-signer will be protected.

Chapter 13 is comparable to a consolidation loan with the payments being sent to the trustee who will in turn distribute the payments to creditors. While the Chapter 13 is in progress, there will be no contact between the debtor and the creditors.

Since debts are one of the biggest issues facing people today, it is good to know there are alternatives to get out from under stifling financial circumstances. Picking the right option is imperative. Discussing all the possible choices with a legal professional experienced in the pluses and minuses of filing for Chapter 13 is essential.

Source:, "Chapter 13 -- Bankruptcy Basics -- Advantages of Chapter 13," accessed on Aug. 15, 2017

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