Chapter 13 bankruptcy is very different (and much more complicated) when compared to Chapter 7 bankruptcy. Instead of keeping some property while losing other property, Chapter 13 generally involves keeping most or all of your property, but being forced to make payments to your creditors to account for the value of that property over a period of three to five years. Chapter 13 has other unique quirks to it as well (such as limits on the amount of debt you can have), but it also offers powerful benefits to certain filers, such as being able to cram down vehicle loans, being able to strip liens off homes, etc. Chapter 13 definitely isn’t for everybody – it isn’t even for most people – but for the right people it can be just what the doctor ordered. It is imperative for a person considering a Chapter 13 bankruptcy filing to understand the process and to understand the potential pitfalls of doing so, as a failure to understand that may cause the case to fail, forcing them to either file again (under this chapter or another chapter) and imposing all sorts of additional hardships on them that a properly-planned filing would have prevented.
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