Bankruptcy Lawyers: The Benefits of Filing for Chapter 13 Bankruptcy

sign in a field of grass that says "chapter 13"


By:Mike Cibik


When facing a debt(s) that has spiraled out of control, filing for bankruptcy may be the only option. Bankruptcy has become a shameful word. At Cibik & Cataldo, we feel it shouldn’t be; it’s just a financial solution. We are not saying it should be abused, but it makes life a lot easier, and you can start over financially. Chapter 13 means that you are keeping most of your assets, whereas a Chapter 7 bankruptcy means you are liquidating practically all of them. It is a positive step towards fixing your finances.

When faced with filing, you shouldn’t get just any lawyer; you should get a bankruptcy attorney. Bankruptcy lawyers solely deal with these situations. They aren’t spreading themselves thin with other practice areas, such as wills and DUIs. Filing for bankruptcy is a last resort, and careful consideration must be applied before filing as well as choosing the right type of bankruptcy.

Advantages of Chapter 13 Bankruptcy

During this process, it’s best to look at the benefits of a Chapter 13. When you choose a Chapter 13, you are saving your home from foreclosure. You want to keep it and other assets, such as a car or non-exempt property. To file, you must have a regular income and not have more than $250,000 in unsecured and more than $750,000 in secured debt. The advantages are:

  1. Stopping a Foreclosure – You must still make the mortgage payments, but the threat of foreclosure is gone. You can also catch up on missing mortgage or car payments too. You must file for Chapter 13 before the foreclosure sale.

  2. Achieving Long-term Financial Health – Since you are making one monthly payment to a bankruptcy trustee, you will get into the habit of budgeting. Once discharged from the bankruptcy, you will be in better financial shape, and you may turn the monthly payment into a savings account.

  3. Protecting 3rd Parties – This protects those who are liable on “consumer debts.” Thus, those who co-signed in a loan are protected.

  4. Rescheduling Payments – You can reschedule secured debts and extend them over the payment plan.

  5. Removing 2nd Mortgages – This type of bankruptcy can remove 2nd or higher mortgages, giving you more room to make your primary mortgage payment. This is called lien stripping. You must qualify for it – your home must be equal to or less than the primary mortgage. When the bankruptcy has been discharged, the lien is stripped away. Lien stripping can also apply to car loans.

  6. Helping with IRS Issues – Some taxes can be discharged as unsecured debts (e.g., a medical bill). Thus, you are not paying the interest on the taxes. Also, since liens can be removed from a property, you can pay less than the amount of the lien depending on the amount of property equity.

  7. Including Student Loans – They can be included in the Chapter 13 payment plan.

  8. Filing for Bankruptcy Again – If you have filed for Chapter 7 bankruptcy in the last eight years, you can file for Chapter 13 bankruptcy. Also, debts that could not be discharged in Chapter 7 can be reduced in a Chapter 13.

Handling Bankruptcy Cases in Philadelphia

Our team of bankruptcy attorneys here at Cibik and Cataldo know Chapter 13 bankruptcy inside and out. They know what you can and cannot keep in this type of bankruptcy and how to set up an affordable payment plan. We know this is a stressful time for you and your family. Let us show you how easy it is to file. Call today at (215) 735-1060 or fill out a quick contact form to schedule a free consultation to meet with you.


Bankruptcy Law Awards/Associations

We are a debt relief agency that helps people
seek bankruptcy protection under federal law