Individuals considering bankruptcy must decide whether to file for Chapter 7 or Chapter 13 protection. A Chapter 7 is generally a liquidation where most of the individual's debt is discharged and payments are not made. Conversely, in a Chapter 13, those with regular incomes set up a plan to pay some or all of their debts over time. Here are three benefits to filing a Chapter 13 that don't exist in a Chapter 7.

Stops Foreclosure

In a Chapter 13, the debtor sets up a plan to pay off any arrearages to the mortgage for his primary residence. The mortgage holder may not foreclose unless the debtor falls behind in the payments, so most debtors are able to keep their homes.

Refinance Secured Debts

Other secured debts such as homeowners association dues or car payments may be refinanced and paid over the term of the bankruptcy. This typically lowers the monthly payment amount.

Stops Creditor Activity

Once a Chapter 13 petition is filed, collection activity is stayed. This stops the calls from creditors. The debtor makes all payments to the bankruptcy trustee, so they no longer have to deal with harassment or intimidation from debt collectors.

If you are considering bankruptcy to help get your debts under control without losing your home, a Chapter 13 might be the solution for you. Calling The Law Offices of John A. Foscato in Green Bay at 920-432-8801 for further information on how a Chapter 13 helps you.