One of the most unique places to live in all of Texas, and consistently ranked highly among best places to live in the country, Plano Texas is still in a country reeling from recession. Foreclosures, unemployment, and debt are a major problem. While medical debt may be the leading cause of bankruptcy, foreclosure is a key cause of bankruptcy. And foreclosure is one of the reasons to file Chapter 13 bankruptcy in Plano Texas. This blog guide explains why you might file, how you should file, and what the advantages are.
What is Chapter 13 bankruptcy?
Chapter 13 bankruptcy is a debt repayment plan typically lasting 3-5 years. The other form of personal bankruptcy is Chapter 7, and it’s much more common in Texas. However, Chapter 13 bankruptcy is different. You are not eliminating debt. You are paying on it. You are not getting this done immediately; you are waiting some time for the results. There are some advantages too.
Why file Chapter 13 bankruptcy?
The Texas Homestead Exemption protects many Plano home owners from losing their home, but it’s not always an option. The Homestead Exemption makes it so you never will lose your home because of a debt owed, unless it’s the actual money owed on your home. If you stop making payments on your mortgage, you can lose your home. But if you cannot pay on any other debt, whether it’s credit or medical or some other money owed, the creditor cannot seize your home.
Now, what if you cannot keep up with the mortgage? The advantage with Chapter 13 bankruptcy is that you can set up a debt repayment plan to start making affordable payments on the mortgage. You can do the same with your other debts, including unsecured debts like credit and medical, and secured debts like your car. If you file Chapter 7 bankruptcy, you stand to lose more property and assets. If you file Chapter 13, you can protect your property and assets if you can pay on them over time.
Since we mentioned Chapter 7 bankruptcy several times, you may wonder why more Plano residents file this form of bankruptcy over Chapter 13. Chapter 7 bankruptcy can be quite effective in saving you money. It’s a liquidation, where your assets are liquidated in order to pay off debts. While it’s not common for major assets to be taken, it does happen. On the other hand, if you owe a lot, it can be more than worth it. You are not paying on your debts here; you are eliminating them.
How to Save Your Home
If you cannot keep up with your mortgage, and fear foreclosure, you may consider Chapter 13 bankruptcy to protect it. You can make your mortgage part of the repayment plan and buy yourself some time.
How to Get Help
If you are unsure about how Chapter 13 bankruptcy will help you or protect your Plano home, it’s time to consult with an experienced Texas bankruptcy lawyer. A lawyer is invaluable in understanding bankruptcy, in saving money, and in protecting key assets.