Why file a chapter 13 bankruptcy?

As mentioned before a chapter 7 bankruptcy requires that your liquid assets that are non-exempt under the state law be used to pay off your creditors. You should consider filing a chapter 13 bankruptcy instead if you have a secured debt like a car loan or a mortgage loan that you want to continue paying. Chapter 13 bankruptcy may be a better option if you want to keep certain assets which would be considered as non-exempt liquid assets under the chapter 7 bankruptcy. Furthermore if your income is above the median for your family size in your state you will not be able to file chapter 7 bankruptcy.

According to the U.S. Bankruptcy Code, to file chapter 13, you cannot have more than $992,975 in secured debt and $307,675 in unsecured debt.

Same as chapter 7 getting credit counseling from an approved credit counseling agency is mandatory of filing a chapter 13 bankruptcy.

Bankruptcy laws and filing is complex. It’s a good idea to always seek advice from a good attorney before filing for bankruptcy about the procedure, paperwork involved and which bankruptcy to file for.

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