6 Reasons for Filing for Chapter 13

An alternative to bankruptcy for some people is the Chapter 13. It is generally called reorganization bankruptcy. Most people who file for Chapter13 bankruptcy are individuals who wish to pay back their debts across a time period of three to five years.

Many people who own taxable property and wish to hold on to it will file for Chapter 13 instead of Chapter 7.

There can be several reasons why some individuals may prefer Chapter 13 bankruptcy rather than Chapter 7 bankruptcy. Usually, you are likely a right candidate for Chapter 13 bankruptcy if you fall into these categories:

1. You truly want to pay back your debts, only you want the security of the bankruptcy court to do so.

2. You have fallen behind your mortgage payments or automobile loan, and wish to catch up with the neglected payments and you need the extra time to make those payments so then you will be able to reestablish the original agreement. This is not possible when filling for Chapter 7 bankruptcy. It is only possible to make up missed payments in Chapter 13 bankruptcy.

3. You want help and direction in paying back your debts right away, however, you would also like the choice of filing for Chapter 7 bankruptcy in the future.

4. You are a farmer who owns a family farm and wants to pay back your debts, however, you don't qualify for a Chapter 12 for family farming bankruptcy since you have a large debt unrelated to farming.

5. You have valuable taxable property. Once you file for Chapter 7 bankruptcy, you can keep certain properties. If you have great deal of taxable property then Chapter 13 bankruptcy could possibly be the better alternative.

6. You obtained a Chapter 7 discharge within the past eight years. You can't file for Chapter 7 again until the eight years are up.

A Chapter 13 can be filed if:

- The debtor obtained a discharge under Chapter 7, 11 or 12 more than four years ago

- The debtor obtained a discharge under Chapter 13 more than two years ago.

- You have a co-debtor on a personal debt. If you file for Chapter 7 bankruptcy, your creditor will pursue the co-debtor for payment. If you file for Chapter 13 bankruptcy, then the creditor can't touch your co-debtor, that is if you keep up your payments.

If any of thesse 6 reasons pertain to you and your situation then filling for a chapter 13 maybe a good idea.