Bankruptcy filed under Chapter 13 presents people a variety of pros over liquidation under Chap 7. Probably most significantly, chapter 13 provides men and women a way to preserve their homes from foreclosure. By filing under this chapter, consumers can halt foreclosure proceedings and may cure overdue mortgage payments over time.

Nonetheless, they will have to still make all mortgage payments that come due during the chapter 13 plan on time. Yet another benefit of ch 13 is that it allows men and women to reschedule secured debts (other than a mortgage for their primary residence) and extend them over the life of the bankruptcy filed under chapter 13 plan. Doing this may lower the payments.

Chapter 13 also has a unique provision that protects third parties who are accountable to the debtor on „consumer debts.“ This provision might protect co-signers. Lastly, chapter 13 bankruptcy acts like a consolidation loan under which the person makes the plan payments to a chap 13 trustee who then directs payments to creditors. Men and women will have no immediate contact with creditors while under chapter 13 bankruptcy protection.

Any individual, even if self-employed or operating an unincorporated business, is suitable for ch 13 relief as long as the individual’s unsecured debts are less than $360,475 and secured debts are less than $1,081,400. These amounts are altered regularly to echo changes in the consumer price index. A corporation or partnership may not be a bankruptcy filed under chapter 13 debtor.

A person can’t file under chap 13 or any other chapter if, during the former 180 days, a prior bankruptcy petition was dismissed due to the debtor’s willful failure to appear before the court or comply with orders of the court or was voluntarily dismissed after creditors sought relief from the bankruptcy court to recover property upon which they hold liens. Additionally, no person can be a debtor under bankruptcy filed under chapter 13 or any chapter of the Bankruptcy Code unless he or she has, within 180 days ahead of filing, received credit counseling from an approved credit counseling agency either in an individual or group briefing. There are exceptions in emergency circumstances or where the U.S. trustee (or bankruptcy administrator) has established that there are inadequate approved agencies to provide the required counseling. If a debt management plan is formulated during necessary credit counseling, it has to be filed with the court.

If you’re considering bankruptcy, talk to a local MA bankruptcy attorney about your options. An experienced MA bankruptcy attorney can provide you with which options are right for you.