The benefits of Chapter 13 bankruptcy

April Randle • Apr 16, 2020

The benefits of Chapter 13 bankruptcy

Thanks to the opportunity to discharge debt and start fresh, most people prefer Chapter 7 over Chapter 13 bankruptcy. However, there are people who don’t qualify for Chapter 7, so they have no choice but to consider other avenues for managing their debt.


Once you understand the benefits of Chapter 13 bankruptcy, you may come to find that it’s the right choice for you. Here’s what you can expect:


  • More time to make payments: Although you don’t discharge debt like you do in Chapter 7, Chapter 13 bankruptcy buys you more time to make payments through your repayment plan. And with the ability to stretch out your debt payments, it can reduce the amount that you owe each month.
  • No risk of losing property: As long as you’re making payments as required by your Chapter 13 bankruptcy repayment plan, you get to keep the property associated with those payments.
  • Less time in your credit report: A Chapter 13 bankruptcy filing will remain on your credit report for seven years. While it’s a long time, it’s three years less than a Chapter 7 filing.
  • Save your home from foreclosure: For many people, this is the primary benefit of either type of bankruptcy filing. Upon filing, the automatic stay will stop foreclosure proceedings. And with Chapter 13 bankruptcy, you have the opportunity to make up delinquent payments over the course of your repayment plan. If you can afford to make your mortgage payments after bankruptcy, you may be able to save your home from foreclosure or avoid selling it.


Even though the benefits of Chapter 13 bankruptcy are different than Chapter 7, they can still have a positive impact on your life. So, don’t look down on bankruptcy if you don’t qualify for Chapter 7. This remains a viable option for many.


If you decide in favor of Chapter 13 bankruptcy, learn more about the process, how to prepare, what to expect along the way and how you can protect your legal rights.


It’s a big decision to file for any type of bankruptcy, but with so many benefits it could be just what you need to repair many of your financial mistakes.

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