Although there are several types of bankruptcy programs allowed under the law, there is only one that has been specifically established for the average wage earner. Under court supervision, a plan can be developed that allows an individual to repay some of their debts over an established period of time.
After being granted the rights of protection under Chapter 13, the court creates a three- to five-year repayment plan that is to be strictly followed by the petitioner. Here are four benefits of a Chapter 13 bankruptcy.
Consolidate Your Payments
After talking to a Chapter 13 lawyer Orlando FL, and having a court hearing, monies owed to all the court-ordered creditors are lumped into one sum that is sent to a trustee. The trustee then makes all the payments to your credit cards, banks, personal loans, and other owed creditors. This helps make sure you don’t forget any of the payments.
Keep Your Home
If you are behind on your home, the mortgage payments can be included in the trustee payments. With regular amounts, there is a chance to catch up the money owed and save your home from foreclosure.
When the judge sets up your creditor list, the ruling prevents the debt collector from seeking money from any person that signed on your accounts. This can protect your parents or friends that helped you by signing for you and making sure his or her credit is not damaged.
Maintain Credit Reports
A Chapter 13 is reported to the credit bureaus and often does damage to your credit rating, but there is good news. While a Chapter 7 stays on the record for ten years, a Chapter 13 is only reported for seven years.
If you have questions regarding the type of bankruptcy that is best for you, contact a bankruptcy attorney. He or she can answer all your questions and help you begin the lengthy process.