What are the Benefits of Filing Chapter 13 Bankruptcy?

Chapter 13 bankruptcy is sometimes referred to as a wage earner's plan. Chapter 13 bankruptcy allows a debtor with regular income to offer a repayment plan to repay debt in installments over the course of three to five years.

If a debtor’s current monthly income is less than the state median where they reside, the plan will typically be set in place for three years. If their income is more than the applicable state median, the repayment plan is typically set up for five years. A repayment plan cannot exceed five years. As long as the debtor complies with the repayment plan, creditors are forbidden by law from starting or continuing collection attempts.

One of the most significant benefits of filing Chapter 13 is the opportunity to save your home from foreclosure. Chapter 13 gives a debtor the opportunity to make their delinquent mortgage payments over the term of their plan, while making current payments. Another benefit of Chapter 13 is that it has a special provision that protects co-signors. In chapter 13, the debtor makes planned payments to a trustee who distributes payments to creditors. Creditors are not allowed to have direct contact with t debtors while under chapter 13 protection. A no cost consultation with an experienced Bankruptcy Lawyer in CT RRC-LLC can help you decide if Chapter 13 Bankruptcy is best for your situation.