Save Your House
A person may file a Chapter 13 rather than a Chapter 7 bankruptcy for a variety of reason. Some prime examples are:
A person may make too much money to qualify for Chapter 7 bankruptcy;
A person may have too much non-exempt property that would be lost to the trustee in a Chapter 7 bankruptcy case;
To pay off taxes that would not be discharged in a Chapter 7 bankruptcy;
To stop a foreclosure sale and get caught up on mortgage payments;
To strip off liens on real estate that are wholly unsecured.
Whatever the reasons, filing a Chapter 13 bankruptcy case can be a very complicated undertaking. Chapter 13 allows a person to reorganize their debt into a repayment plan that fits their budget and typically lasts three to five years. Rather than paying dozens of different creditors every month, you will send in a single payment to a court-appointed trustee, who then disburses payments to creditors. The monthly payment is your disposable income, which is your monthly income minus necessary living expenses.