Headed for bankruptcy? It does not necessarily mean the end of the road for you or your family. Choosing which bankruptcy chapter to file can make all the difference in Wisconsin. Chapter 13 bankruptcy has a ton of advantages over Chapter 7, which will be discussed in today’s post.
When filing for Chapter 13, the debtor can make payments to creditors between a span of three to five years. If the monthly income of the debtor is less than the state median, the debtor will make payments to creditors over the span of three years. The court could provide the debtor with a longer repayment period if cause is present. The plan will last for five years if the debtor’s monthly income is more than the state median.
One of the most important advantages of filing for Chapter 13 instead of Chapter 7 is that foreclosure can be avoided. Foreclosure is almost a foregone conclusion when filing for Chapter 7, which is liquidation of your assets. People are able to make up missed mortgage payments when filing Chapter 13. You are also allowed to pay the mortgage while with Chapter 13, but payments must be made on time.
Another big advantage of filing for Chapter 13 bankruptcy is that the debtor can reschedule secured debts, aside from a mortgage, that can be repaid to the creditors over the life of the bankruptcy. This can help to lower the monthly payments.
Debtors who file for Chapter 13 bankruptcy in Wisconsin will also see an advantage on their credit reports compared to Chapter 7 bankruptcy. A credit report shows Chapter 13 for seven years, while Chapter 7 is shown for 10 years. This is very important since creditors use a person’s credit report to determine whether or not vehicle loans, credit card applications and rent for housing.
Visit our page today to learn more about Chapter 13 bankruptcy in Milwaukee, Wisconsin, and how to file when the time comes.