Top 5 Reasons People File for Chapter 13 Bankruptcy

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For an average American, bankruptcy of any kind is a sign of personal failure. It’s something that comes about when you incur too much debt to ever pay off. However, bankruptcy is sometimes necessary though, and there are people who have a genuine need for it. Chapter 13 bankruptcy is a form of bankruptcy that allows you to come up with a comprehensive plan to pay back creditors and get a future with some hope.

However, in order to successfully file for Chapter 13, you have to really know what you’re doing and be prepared for a few negative repercussions. You can seek the help of a bankruptcy lawyer from The Harris Firm for further information on Chapter 13 and other options.

Let us now see into the top 5 reasons to file for Chapter 13 bankruptcy.

1. Behind on mortgage payments, the danger of foreclosure

It can be very hard to keep up with the mortgage payments if you’re not careful and only have a fixed-income job. As any homeowner, you want to keep your house. If you cannot make the mortgage anymore, you can file for Chapter 13. This will allow you to catch up on your payments without losing your home.


2. Behind on car payments, the danger of repossession

The same thing can happen with your car. If you’re very behind on your car payments, it will be repossessed in a few months. However, if you file for Chapter 13 bankruptcy, the court will allow you to make up missed payments on your vehicle so that you can keep it.

3. Previously filed a Chapter 7 bankruptcy

If you’ve filed a Chapter 7 before and still have high debts, it is possible to file for a Chapter 13 bankruptcy. In order to do this, you will need to show that you are making an effort to pay off some of your debts or all of them as fast as possible.

4. Behind on utility payments, utilities shut off

If you owe too much to your utility company, they can shut off your electricity. However, if you file for Chapter 13 bankruptcy, they will allow you to catch up on making some of the payments or even all of them.

5. Separation and divorce

Sometimes, people end up separating from their spouses. In this case, they are committed to financially helping the spouse until all of their debts are paid off. It is possible to continue with Chapter 13 bankruptcy in this event, thus, ensuring that you will not have to deal with any of your spouse’s unpaid financial obligations.