Job losses, medical emergencies, and other temporary financial problems can leave you behind on your mortgage, car loans, and other pressing payments. Even if you have the income to start making your regular payments again, catching up on your past due amounts can sometimes seem impossible, especially if your lender demands the entire sum at once. In these situations, a Chapter 13 bankruptcy may be the best way to get your finances back on track.

The Benefits of Chapter 13 Bankruptcy

Catching Up on Past Due Amounts

A Chapter 13 bankruptcy allows you to pay back past due amounts through a court-managed repayment plan. For instance, your repayment plan might include missed mortgage payments, arrears on an auto loan, and priority unsecured debts that can’t be discharged. Chapter 13 repayment plans usually last three to five years, after which all of your accounts will be current.

Keeping Your Personal Possessions

Because you’ll be repaying at least a portion of your debts under a Chapter 13 bankruptcy, you generally won’t have to surrender any of your assets to the trustee. This option is best for borrowers with significant equity in their home, and other items they might lose under Chapter 7.

Discharging Unsecured Debts

While paying back your secured debts, Chapter 13 bankruptcy will also eliminate many of your credit cards, personal loans, and other unsecured accounts. Your creditors must receive at least as much as they would have if you’d filed for Chapter 7, but the remainder of your debt will likely be eliminated.  

If you’re struggling with unmanageable debts, the Law Offices of Frank E Turney, P.A. has the expertise to help you get the debt relief you need. Since 1993, they’ve helped borrowers throughout the Greater Baltimore area reclaim their lives from debt and gain control over their finances. Visit their website for more on their bankruptcy services or call (410) 788-­8830 to arrange a free consultation with a legal professional.