Advantages and Disadvantages of Chapter 13
Milwaukee Chapter 13 Bankruptcy Attorney
- Debtor may cure loan defaults by making installment payments, and reinstate accelerated mortgage and other notes.
- Debtor may be able to modify interest rates on some loans and extend the payment term on non-homestead debts to make them more affordable.
- Debtor may have the ability to “write-down” secured non-homestead debts to the value of the collateral.
- The Chapter 13 discharge is broader than under Chapter 7, so that more types of debts are dischargeable.
- Debtor may be able to force (“cram-down”) affordable payments on secured and tax creditors that cannot be done under Chapter 7.
- Debtor retains all desired property, provided creditors obtain at least as much under the plan as they would under Chapter 7.
- Bars post-filing creditor actions against co-debtors if the creditor will be paid in full under the plan.
- Debtor’s future income is subject to administration by the trustee for up to three and possibly as long as five years.
- Under the plan, the debtor must establish and live under a firm, but potentially adjustable budget during the repayment period.
- The trustee is entitled to a commission on payments paid to creditors which reduces the value of what is paid to creditors.
- Still appears as a bankruptcy on credit reports.