When Chapter 13 Is Better Than Chapter 7 | Portland, OR

When Chapter 13 Bankruptcy Is Better Than Chapter 7 Bankruptcy

Chapter 13 vs. Chapter 7: Determining the Best Bankruptcy Path for You

There are certain situations in which you may think you need to file for Chapter 13 bankruptcy to resolve your debt problems. Reading multiple articles on the internet can give you the impression that Chapter 13 bankruptcy is the best option for you. In this article, with the assistance of an experienced bankruptcy attorney, you will learn when Chapter 13 bankruptcy is better than Chapter 7 bankruptcy.

In Portland, Oregon, Michael D. O’Brien & Associates, P.C. is the bankruptcy law firm that can effectively and efficiently assist you with your debt problems. Not only do we help you understand the process, but we also provide a personalized approach because we understand that every situation is unique. We are board-certified, experienced, and our legal services are affordable. Get a free initial consultation now!

What is Chapter 13 Bankruptcy?

Chapter 13 bankruptcy is a type of bankruptcy that allows individuals with regular income to reorganize their debts and pay them off over a period of three to five years. This type of bankruptcy is often referred to as a “wage earner’s plan” because it is designed to help people who have a steady income but are struggling to make their debt payments.

To qualify for Chapter 13 bankruptcy, you must have regular income, have filed all required tax returns for tax periods ending within four years of your bankruptcy filing, and meet other requirements set forth in the bankruptcy code. You must also be able to afford to make monthly payments to a bankruptcy trustee.

Under Chapter 13 bankruptcy, you will create a repayment plan that outlines how you will pay off your debts. The plan must be approved by the bankruptcy court, and it must be realistic and achievable. You must make all of your monthly payments to the bankruptcy trustee, who will then distribute the money to your creditors.

Key Features of Chapter 13 Bankruptcy

  • Debt Consolidation: Chapter 13 allows you to consolidate your debts into a single monthly payment, making it more manageable and less stressful.
  • Asset Protection: Unlike Chapter 7, where assets may be sold to pay off creditors, Chapter 13 typically enables you to retain your property, provided you adhere to the repayment plan.
  • Stop Foreclosure: If you’re facing the threat of foreclosure on your home, Chapter 13 can put a stop to it and provide an opportunity to catch up on missed mortgage payments.
  • Co-Signer Protection: Chapter 13 safeguards co-signers from being pursued by creditors as long as you fulfill the repayment plan.
  • Credit Score Recovery: While Chapter 13 will appear on your credit report, it allows you to demonstrate a commitment to repaying your debts and can eventually lead to credit score improvement.

When Chapter 13 Bankruptcy Is Better Than Chapter 7 Bankruptcy in Portland, Oregon

Chapter 13 bankruptcy is a type of bankruptcy that allows individuals with regular income to reorganize their debts and pay them off over a period of three to five years. This type of bankruptcy is often referred to as a “wage earner’s plan” because it is designed to help people who have a steady income but are struggling to make their debt payments.

In Portland, Oregon, Chapter 13 bankruptcy may be preferable in the following situations:

  • You have too much income to qualify for Chapter 7 bankruptcy. The median income in Oregon is around $66,500 for a household of one and about $88,400 for a household of two. If your income is above these thresholds, you will not qualify for Chapter 7 bankruptcy unless you can pass the means test. The means test is a calculation that determines whether you have enough disposable income to repay your debts over a period of five years. If you cannot pass the means test, you will need to file for Chapter 13 bankruptcy.
  • You want to keep your home or car. Chapter 13 bankruptcy can help you keep your home or car by allowing you to modify your mortgage or car loan payments. In some cases, you may even be able to reduce your monthly payments.
  • You need to repay a specific debt, such as a student loan or medical debt. Chapter 13 bankruptcy allows you to repay specific debts over a period of three to five years. This can be helpful if you have a debt that is causing you financial hardship, such as a student loan or medical debt.
  • You want to get out of debt and improve your credit score. Chapter 13 bankruptcy can help you get out of debt and improve your credit score over time. Once you complete your repayment plan, your debts will be discharged and your credit score will start to improve.

What to Expect After Filing for Chapter 13 Bankruptcy

Filing for Chapter 13 bankruptcy can be a daunting process, but it can also be a way to get out of debt and get a fresh start. Here is what you can expect after filing for Chapter 13 bankruptcy:

  • Automatic stay: Within minutes of filing your bankruptcy petition, an automatic stay goes into effect. This prevents your creditors from taking any collection actions against you, such as garnishing your wages or repossessing your property.
  • Credit counseling: You will be required to complete credit counseling before you can file for Chapter 13 bankruptcy. This counseling will help you understand your financial situation and develop a budget.
  • Repayment plan: You will need to create a repayment plan that outlines how you will repay your debts over a period of three to five years. Your plan must be approved by the bankruptcy court.
  • Monthly payments: You will be required to make monthly payments to the bankruptcy trustee, who will then distribute the money to your creditors. Your payments will be based on your income and expenses.
  • Meeting of creditors: You will be required to attend a meeting of creditors, where your creditors will have the opportunity to ask you questions about your bankruptcy.
  • Confirmation hearing: Your repayment plan will need to be confirmed by the bankruptcy court. This is a hearing where the court will review your plan and make sure it is fair and feasible

Speak With Our Experienced Bankruptcy Attorney in Portland, Oregon Now!

Solving your financial problems or debts by filing for Chapter 13 bankruptcy can be the best solution. However, not everyone is aware of how complicated the entire process can be. To avoid mistakes, you have to be knowledgeable about bankruptcy laws. In other words, to achieve the best possible results, you need an experienced, board-certified, and affordable bankruptcy law firm.

Michael D. O’Brien & Associates, P.C. is the one you can rely on. We help you resolve your financial problems and achieve your financial goals. Our legal team will go to any length to ensure that you understand the overall process of Chapter 13 bankruptcy and that you do not get lost along the way. Get a free financial consultation today!

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