CHAPTER 13
Chapter 13 Bankruptcy or Debt Reorganization:
Chapter 13 Bankruptcy is quite different from Chapter 7 Bankruptcy. In a Chapter 13 Bankruptcy you submit a "Plan" to pay creditors. Depending on your circumstances, your "Plan" may call for a payment such that your unsecured creditors receive almost zero, it may call for payment of 100% of your debt, or it may call for payment of somewhere between zero and 100%. In those instances where your creditors are paid virtually nothing, your Chapter 13 Bankruptcy may highly resemble a Chapter 7 Bankruptcy. Chapter 13 Bankruptcy is often used to force mortgage creditors to allow you to catch up delinquent mortgage payments over a period of 3 to 5 years. In many cases you may be able to save your home from foreclosure, and still cancel your unsecured debts. In some cases where you have a 2nd mortgage, you may even be able to eliminate the 2nd mortgage altogether. A Chapter 13 Bankruptcy has other benefits which should always be considered before you make the final decision to file a Chapter 7 Bankruptcy.