When is Chapter 13 Bankruptcy a Good Option?
A Chapter 7 Bankruptcy is what most people think of when you say “Bankruptcy“. This bankruptcy deals with unsecured debts. If you are behind on your house or car the chapter 7 will not help you to keep those things. The chapter 13 bankruptcy is mainly used for people that have fallen behind on their house or car. It is a plan to allow you to put the arrears in a plan and pay it back over the next five years. The mortgage company plan is usually to pay the arrears back over the next six month to a year, making it impossible to catch up. If the mortgage company has given up on you and has started a foreclosure sale the filing of the Bankruptcy will stop the sale as late as the day of the sale. In the process of helping you with the home your credit cards or other unsecured debts will be taken care of. The payment to them is based on what is called disposable income. Whether after the five years the creditors have received all there money or none the rest is discharged.
If you have fallen behind on your mortgage you might talk to a bankruptcy attorney to see how the laws can help you.
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