Today we’re continuing our series on legal terms, and we’re going to talk about bankruptcy.
A Chapter 13 bankruptcy is where we pull all of our debts together, and we pay them off over a 3 or 5 year period.
A Chapter 13 is also called debtor’s court.
This is because we pay off our debts over a period of time, instead of wiping them all away like we would in a Chapter 7 bankruptcy.
Paying them off over time makes catching up doable, and helps get control over the debt we’ve accumulated. Normally we continue to make our normal car or mortgage payments while in the Chapter 13.
A Chapter 13 bankruptcy is most appropriate when it is used to stop a foreclosure.
However, my opinion is a Chapter 13 Bankruptcy should only be done if all other options fail to stop the foreclosure.
There are plenty of other ways to stop a foreclosure before a Chapter 13 bankruptcy.
A Chapter 13 bankruptcy is a good way to consolidate debt, and gives you some breathing room to take care of it.
If you have any questions, you can reach us by phone at 1-205-879-2447.
I look forward to chatting with you!
Have a great day.