Learn About The Benefits To Filing Chapter 13 Bankruptcy


The idea of there being benefits to any form of bankruptcy may seem ludicrous, but there are several benefits to be had by filing Chapter 13 bankruptcy, if the applicant meets the bankruptcy trustee’s requirements. If you’re considering filing for Chapter 13 bankruptcy and also seeking additional information about the potential benefits, then be sure to read on to learn more.

Avoiding Foreclosure On Your Home

When your home is foreclosed on by your creditor, you will lose every last cent that you have put into your monthly payments, as well as any improvements and upkeep that have been made. Filing for Chapter 13 bankruptcy puts a stop to your foreclosure proceedings immediately and gives you a chance to set up a payment plan in a court of law.
This form of bankruptcy also provides a valuable opportunity to get back up to date with any delinquent back payments that have been missed. Car loans are also included during a Chapter 13 bankruptcy, so that people who are still earning a solid living wage can retain possession of their vehicles and make their way to and from their place of employment each day.

Chapter 13 Bankruptcies Are Quickly Removed From A Credit Report

Chapter 7 bankruptcies may seem simpler than Chapter 13 filings, but Chapter 13 comes with the advantage of being removed from your credit report far more rapidly. Chapter 7 bankruptcies remain on the debtor’s credit report for a full ten years after the initial filing, whereas a a Chapter 13 bankruptcy is eligible for removal within seven years.

A creditor will have three less years of knowledge at their disposal when you file for a Chapter 13 bankruptcy, which greatly increases your chances of being able to receive loans sooner. Credit reports are also used for a number of other expenses, such as credit cards and vehicle finance loans, so if you’re looking to expedite the process of financial rehabilitation, Chapter 13 is the way to go.

Restructuring Debts

Sometimes, we fall behind on certain debts because we do not have enough time to pay them back or the monthly payments have simply become too onerous. Chapter 13 enables the restructuring of debts and allows them to extend their monthly payments over the existence of their Chapter 13 repayment plan.

By doing so, monthly payments are typically made lower, which serves to ease the financial burden for the debtor. As an added bonus, Chapter 13 bankruptcies also reduce the debtor’s contact with their creditors. Instead of paying their creditors directly each month, the money is disbursed to a bankruptcy trustee, who is then responsible for handling the payments. Chapter 13 provides a higher level of protection and ensures that the debtor experiences no further harassment. If you want to be well informed at the time please consult dallas chapter 7 bankruptcy lawyer.

Establishing Debt Repayment Through Chapter 13 Bankruptcy


Most people work very hard to establish their credit in the United States and live with-in their means. When planning our financial future, we consider our income and make purchases accordingly. However, no matter how carefully we plan; bad things sometimes happen to good people. A sudden illness in the family can drain finances very quickly. A death of a spouse or the loss of a job can destroy a budget and drain savings. But if the missing income is not replaced we find ourselves in financial ruin. The payments going out exceed the finances coming in and soon we are faced with foreclosures, wage garnishing and repossessions.

In a situation like this, people turn to the courts for help. Filing for financial protection under a Chapter 13 bankruptcy allows people to keep the things they have invested in such as their home, automobile and furnishings by setting up a repayment plan they can afford in their new financial situation.
Chapter 13 bankruptcy is sometimes called a Wage Earner plan. This plan is filed through the court system. The lenders (Mortgage Company, credit card companies, medical facilities etc.) are repaid through the plan over a period of time of either three or five years. This does not do away with the debt, it simply regroups it. The payments are easier to handle and it stops the late fees and penalties from growing the debt into an impossible amount.

In order to file for Chapter 13 bankruptcy, people seek the services of a bankruptcy attorney. The attorney will gather the information that the court requires and will file the case. The client must pay the filing fees in advance. The filing fees vary depending on the state in which the client lives. The payment for the services of the attorney can usually be paid through the plan with the other debts.

The client will provide to the attorney (and thus the court) copies of all the debts they owe. They also will prove their income and provide their banking records.

The attorney files the case and a notice is sent out to all of the creditors. Once this is done there will be a meeting of the creditors which allows the creditor to seek repayment through the plan. A date will be set to go to court and the debtor(s) go before the court and swears the information is correct and the court then approves the case and the repayment begins.

The courts advise how much money the debtor must pay each month. In some cases the repayment is made via a payroll deduction, meaning the debtors employer pays the court. Some states allow the repayment to be made via automatic bank draft. The payments are made according to the plan and the court pays the debts from the payment made to them.

In many cases the attorney can reduce the amount a creditor may receive. High interests on loans (such as car loans) may be reduced to 5% (interest). Credit cards and other unsecured loans are paid based on the disposable income of the debtor which sometimes reduces the overall amount they receive.

While a client is under Chapter 13 protection, they may not take on any new debts. When the plan is paid out the debtor is in a much better financial situation and most lenders will work with them to reestablish their credit.

Installment Plans With Chapter 13 Bankruptcy

Instead of making full payments, filing fee could be paid in four installments when filing for Chapter 13 bankruptcy. To achieve this, an application must be submitted to the court. This is often referred to as Form 3A – Application to Pay Filing Fee in Installments. The court will sign an order that allows for the payment of fee in installments once the application is approved.

How to Apply for Chapter 13 Bankruptcy Installment Fee PaymentThe moment a Chapter 13 bankruptcy case is filed, the debtor is expected to pay a filing fee of $281.00 that is due to the Courts in the United Stated. However, a debtor may be authorized by the bankruptcy court to make installment payments for the filing fee after the case must have been filed.Installments serve as a way of shifting some of the cost into the future; they offer intuitive appeal. It is also a way of commencing a Chapter 13 bankruptcy with little or no money to offer. However, the proposition of applying for a filing fee installment payment plan could be very dicey in a chapter 13 bankruptcy. Do not forget that it essentially serves as a loan offered by the presiding court.

Practically speaking, installment payment applications are fairly freely granted by some jurisdictions. However, a debtor is still required to make an application before the filing fee can be paid in installments. A declaratory statement “that the debtor is unable to pay the filing fee exception in installments” must be included in the application as stated under Bankruptcy Rule 1006(b)(1).In Chapter 13 bankruptcy, this is not a costless declaration. Doubts on the ability to make payments might just be shed through the installment payment application declaration especially if the payments are reasonably large. The court has all cause to get a bankruptcy case dismissed if an installment payment on the filing fee should be missed by the debtor. Other than that, it can make it hard to stop a creditor from procuring court permission to repossess a car or foreclosure a home.There are tendencies for a bankruptcy judge to be doubtful of any promises to pay if a promise to pay the court itself a reasonable installment on a filing fee by the debtor.

When is The Right Time to Apply for Installment Fee Payment?
The most appropriate time to apply for payment applications is when there is a change in something from the day the case is filed to some weeks after. For instance, if a case needs much urgency to file to the extent that the debtor cannot just wait for to file for another paycheck, then the best thing to do is to make full payment of the fee as quickly as possible to prove that the inability to pay was simply a temporary occurrence.

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