If you’re facing a significant amount of debt but you have at least some disposable income every month, a bankruptcy lawyer may recommend filing for Chapter 13 bankruptcy. Often called “reorganization bankruptcy,” this approach makes debt considerably more manageable by implementing a three- to five-year repayment plan. 

3 Benefits of Chapter 13

1. Avoid Foreclosure

With Chapter 13, it may be possible to keep your home, even if you’ve fallen behind on the mortgage. A bankruptcy lawyer can evaluate your situation to determine if foreclosure is avoidable. As long as you can roll the past due amount into the repayment plan while still making regular monthly mortgage payments, you may be able to get caught up.

2. Retain Non-Exempt Assets

Whereas Chapter 7 bankruptcy liquidates non-exempt assets to pay back creditors, Chapter 13 allows petitioners to retain them. However, you’ll have to pay their associated lender the value of the asset over the life of the repayment plan. Nonexempt assets typically include vacation homes, luxury vehicles with equity, valuable collectibles, investment accounts, artwork, and jewelry. 

3. Repair Credit Faster

Chapter 13 will only remain on your credit report for seven years. The faster you rebuild your credit after filing, the sooner you’ll be able to finance major purchases again. If you intend on buying a house in the near future, for example, your attorney may advise Chapter 13 over Chapter 7 because you’ll be able to qualify for a mortgage much sooner.

To see if you’re a good candidate for Chapter 13 bankruptcy, turn to Mark O. Grater Attorney at Law. Based in Groton and serving clients across all of southeastern Connecticut, this bankruptcy lawyer has more than 30 years of experience in the legal field. If you turn to attorney Grater for counsel, you won’t be judged for your situation. Instead, you’ll receive practical—and actionable—advice for securing a clean slate. To request a consultation with this bankruptcy lawyer, reach out on his website or call (860) 449-8059.