When to fill for Chapter 13 bankruptcy

Most of the persons that want to file for bankruptcy don’t want to fill for Chapter 13 plan because a repayment plan is required and also because they need to pay at least a portion of their debts. But sometimes Chapter 13 bankruptcy is a better option than Chapter 7 and sometimes people are forced to get fill for Chapter 13 because they are not eligible for Chapter 13.

To apply for Chapter 7 you need to meet some requirements. For example your income over the last six months needs to be lower than state median wage. So if you are making enough money to repay your debts you will be forced to apply for Chapter 13 bankruptcy.

Another situation when is better to apply for Chapter 13 is when your are behind on your mortgage or car loan and you don’t want to loose them. In this case is better to go for a Chapter 13 bankruptcy because you make a payment plan, give the money to your creditors and continue to keep your properties. Remember that in chapter 7 you will not fully control your assets and will loose any non exempt property .Also you cannot make a repayment plan so if you want to keep any properties that are not in exempt list you have to fill for Chapter 13.

Another reason you may go for Chapter 13 are the tax debts, student loans or any other debts that cannot be wipe out in Chapter 7.In this situation is better to fill for Chapter 13 , include these in the repay plan and and pay them off over time.

When you file for chapter 7 bankruptcy, your codebtor will still be on the hook .If you file for Chapter 13 bankruptcy, the creditor will leave your codebtor alone, as long as you keep up with your bankruptcy plan payments.