Chapter 13 bankruptcy is often the best option for debtors who decide to stop collection efforts from their creditors but still want to repay their debts. People who have fallen behind in their mortgage payments often choose this option because it allows them a chance to “catch up” before their home is foreclosed upon. Filing for Chapter 13 will stop the collection efforts of all the creditors that the debtor lists on the petition and it allows them a variety of options for repayment, if they meet the eligibility requirements.
Eric Ollason, Attorney at Law is a bankruptcy law firm in Tuscon, Arizona. Something else that Chapter 13 bankruptcy stands to borrowers is the chance to reimburse secured obligations over a period. As a rule, the installment arranges lessen the measure of the regularly scheduled installment that the account holder was paying. While Chapter 7 is the most prominent alternative in bankruptcy, numerous individuals pick Chapter 13 since they feel an ethical commitment to reimburse their obligations.
Part 13 bankruptcy is like going into an obligation union credit, which is regularly a choice numerous individuals debilitate before having their obligations released by courts. Both cases include the indebted person giving the regularly scheduled installment to a designated trustee. The trustee then consigns the installments to the lenders as per the assention.
For purposes of getting a mortgage, many companies view both of these equally. In other words, a debt consolidation loan is the same thing as filing for Chapter 13 bankruptcy in the eyes of many mortgage companies. One advantage of these options is that the debtor does not need to have direct contact with the creditors who can have a significant negative impact on a person’s self-esteem.
Not only does it require the creditors to stop contacting the debtor, it also protects homes from foreclosures and third parties from legal recourse. Chapter 13 has several advantages for those who are trying to honestly fulfill their obligations.