What are the benefits of filing
a Chapter 13 bankruptcy? Hi. My name is Eric Engel. I’m a
bankruptcy attorney with the Engel Law Group in Seattle,
Washington. I get a version of this question on almost a daily
basis. It’s usually, “Why should I file for a Chapter 13 when I
can file for Chapter 7?” Or vice versa. There are 6 main benefits
of being able to file for Chapter 13 bankruptcy. One: You
get the automatic stay. That can be beneficial in a variety of
situations. Such as if you have a suspended driver’s license.
Two: You get the ability to enter into a repayment plan. If
you’re behind on your mortgage payments, this is going to allow
you to be able to catch up and keep your home. Three: You can
discharge all your unsecured debts. Those are those credit
cards that you’ve got stacked up and you want to get rid of them.
You can actually do that through a Chapter 13 plan. Four: You can
actually strip liens off of your mortgage. In other words, if you
have a second or third mortgage on your home, it’s possible to
remove those second or third mortgages through a Chapter 13
bankruptcy. Five: you can do what’s called a “cram down” on
an auto loan. What that means is you can reduce the amount of
money you actually owe for your car and also reduce the interest
rate. And finally, you can repay all of your debt as a 0%
interest through the period of the plan, which is one of the
best benefits of having a Chapter 13 plan. Why am I
telling you this? I’m telling you this because you’re
concerned that if you file for a Chapter 13 bankruptcy that
you’re not going to get the same benefits that you would get for
a Chapter 7 bankruptcy. Reality is you’re going to get some
benefits that you’re not going to be able to get in a Chapter
7 bankruptcy. I deal with these sort of issues every day. If
you have questions, call us at 206-625-9800. Thanks for
watching my video and have a nice day!