Advantages Of Chapter 13 Bankruptcy


A bankrupt individual remains in debt until it’s paid off. However, certain laws and codes are there to provide support in this unforeseen situation. Chapter 13 is one such instrument that not only softens the blow but gives you time to recover as well. Chapter 13 bankruptcy is simple terms, is an option to pay your creditors in installment over a specified period. Bankruptcy lawyers in Scottsdale can help you file chapter 13 bankruptcy on flexible terms. However, if you want to know why chapter 13 is a good option for you, then read the following.

Time to Recover

When you file for a chapter 13 bankruptcy, you usually get 3-5 years to pay all your debts. This means not only do you have time to increase your income but also change your spending habits. In addition, it exerts less pressure on you to make lump sum payments; therefore, you can recover from the disaster in time and get back on your feet.


When someone files for bankruptcy, all their properties and assets are usually sold off to clear the debts. However, you can save your home from foreclosure if you apply for chapter 13 bankruptcy in time. This way, you get the time to make payments on missed mortgages. Going through bankruptcy is hard, but chapter 13, at best, allows you to have a roof over your head.

No Creditors

One of the best parts about chapter 13 bankruptcy is that you don’t have to face the creditors directly. Instead, when you file a chapter 13 bankruptcy, the court will appoint a trustee to whom you will make your monthly payments. The trustee will then distribute the amount among the creditors. This gives you peace of mind and saves you the embarrassment of facing creditors.

Credit Rating

Once you clear all the debt, chapter 13 will show on your credit report for a maximum of 7 years, after which your credit rating will start to get better. After that, unlike some other options like chapter 7 bankruptcy, chapter 13 will disappear quickly from all the financial reports.

Reduced Debt

This is one of the most significant advantages of a chapter 13 bankruptcy. There have been cases where the total amount of the debt was reduced, and the creditors were not paid the total amount. But remember, it’s not a guarantee; you need to make the total payments on the revised debt-payment plan to be eligible for it.

Revised Loans and Mortgage Payments

All your previous loans and mortgage payment plans are revised under chapter 13 bankruptcy. So, no matter if you have missed a payment on your loan or a mortgage, a chapter 13 bankruptcy can help you with that. In addition, since everything is revised, you get some time to make up for the missed payments.

Many people out there consider chapter 13 bankruptcy, not as a feasible option. However, it’s one of the few options that give you time to recover and reduce the total amount of debt.

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Stevie Flavio
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