What Should I Know about Chapter 13 Bankruptcy?
Many people do not completely understand what a chapter 13 bankruptcy is or the benefits, or the repercussions of filing a chapter 13 bankruptcy. The chapter 13 bankruptcy is designed for those people, particularly those people who fall behind on their mortgage or their car payments; they would love to be able to catch up. Maybe they fell behind because there’s a period of time where they weren’t able to work, maybe because they were laid off, maybe it was a medical reason. Now they’re back at work and they can afford to meet their regular monthly mortgage payments, they could afford to take care of their regular car payments but they can’t afford to pay a lump sum to the creditor in order to bring those accounts to current.
A chapter 13 bankruptcy allows you to take the arrears that you owe on your mortgage or your car and pay it over a period of 3 to 5 years and at the same time, allow you to resume making your monthly mortgage payments. It’s very beneficial to someone who’s had a situation where they’ve fallen behind through no fault of the wrong, quite frankly, but would love to catch up at a present time.