Lake County, IN Chapter 13 Bankruptcy Attorney
There are some advantages that Chapter 13 has over Chapter 7 bankruptcy. The first and foremost is the fact that your nonexempt assets are not liquidated. Chapter 13 can also discharge the majority of debts while Chapter 7 has certain restrictions on the kind of debt it can discharge.
Basically, Chapter 13 bankruptcy reorganizes your debts into a manageable payment plan that is generally executed over the course of five years. Because it is a more complicated type of filing than Chapter 7, it costs more money. Nonetheless, it can help save your house, car, and preserve your equity in those assets.
Under a Chapter 7 bankruptcy, your equity in valuable assets may only be insured up to a certain amount. In Indiana, there is no specific motor vehicle exemption. What Indiana does offer is a wildcard exemption that allows you to exempt $10,250 worth of personal property. That includes your car. However, if you use the wildcard exemption to protect equity on your car, then you lose that money to protect other assets.
Why Chapter 13 is Sometimes Better
While those who failed to qualify for Chapter 7 usually are forced to file for Chapter 13, not everyone who files for Chapter 13 failed to qualify for Chapter 7. There are those who, due to a number of circumstances, opt to file for Chapter 13 instead of Chapter 7.
- Chapter 13 can save your home from foreclosure: If the majority of your debt is mortgage payments, Chapter 13 is often the better option. Chapter 7 cannot discharge home equity loans. In fact, it does not handle secured loans very well at all. Those who file for Chapter 7 are still obligated to pay mortgage payments and car loans if they want to keep either. In that case, Chapter 13 can help them where Chapter 7 can not.
- You have debt that cannot be discharged: There are certain kinds of debt that cannot be discharged. Those include tax payments and domestic support payments. They also include a host of other kinds of debt. Chapter 13 can help you manage this debt effectively.
- You just need more time to pay: Creditors can be quite aggressive. They may be threatening your property, your wages, or your bank account. When that happens, Chapter 13 can buy you more time and implement a payment plan that meets your needs.
One added bonus of Chapter 13 is that only stays on your credit report for seven years whereas Chapter 7 will stay on your credit report for 10. It is also easier to begin rebuilding your credit after Chapter 13 since you are paying back your debts owed.
Contact a Bankruptcy Lawyer Today
The Law Office of Kevin M. Schmidt has successfully helped numerous clients manage their debt. Give us a call at (219) 756-0555 or contact us online and we can begin discussing your options immediately.