What Are The Advantages of Chapter 13 Bankruptcy?
Chapter 13, in some circumstances, can offer significant advantages over Chapter 7. The main advantages are:
- More debts are dischargeable in Chapter 13 than in Chapter 7;
- Non-dischargeable back taxes and child support can be repaid throughout the case without interference from the creditors and usually without further interest and penalties once the bankruptcy petition is filed;
- A debtor can keep property in a Chapter 13 which might be lost to the trustee in Chapter 7;
- Secured debts in Chapter 13 are generally reduced to the value of the property involved. For example, if a debtor has a vehicle worth $6,000 but owes $8,000 against it, the secured debt is reduced to $6,000 -- the value of the vehicle. (For obvious reasons, this is referred to in legal jargon as a "cram down.") Interest rates on secured debts are generally reduced to 9%;
- A debtor can prevent auto repossessions and home foreclosures and (in the case of a home foreclosure) repay the delinquency over a period of time.
120 South Cross Street · Little Rock, AR 72201 USA
501/376-0550 · Toll Free 800/377-0764 · FAX 501/376-7447
info@clarkbyarlay.com
Copyright © 1998 Clark & Byarlay. All rights reserved.
Design and Hosting by Web International
|
