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Advantages of the Chapter 13 bankruptcy process

This post is included on this Tennessee bankruptcy and debt relief blog to offer readers with an informative overview of some of the ways Chapter 13 bankruptcy may serve their financial needs. It is not intended to state that Chapter 13 bankruptcy is superior to Chapter 7 bankruptcy or that it is always a better choice. All readers should seek their own legal guidance when making a decision about what form of bankruptcy to pursue for their own financial needs.

When a person elects to use Chapter 13 bankruptcy they may experience some benefits that they did not expect. One advantage that Chapter 13 bankruptcy has over Chapter 7 bankruptcy is the length of time that it will linger on the debtor's credit report. Generally, a Chapter 13 bankruptcy will stay on a person's credit report for 7 years while a Chapter 7 bankruptcy will stay on for a full decade. Those three years can be significant in terms of a debtor rebuilding their credit and securing financing for a home, car and other needs.

Also, a debtor may be able to protect their home in Chapter 13 bankruptcy as the process stops foreclosure. They may be permitted to make up missed mortgage payments which is not necessarily an option a debtor may have if they choose to file for Chapter 7 bankruptcy.

A debtor must qualify for Chapter 13 before they may pursue it and use its protections. When a debtor does not qualify they may have to follow a Chapter 7 plan. Both forms of bankruptcy have their advantages and drawbacks and each should be carefully considered before a debtor commits to a specific bankruptcy path.

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Kenneth C. Rannick, P.C.
4416 Brainerd Road
Chattanooga, TN 37411

Phone: 423-624-4002
Toll Free: 800-257-7594
Fax: 423-624-0509
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