Chapter 13 Benefits

: Reese Baker & Associates

  Filed under: Chapter 13


Chapter 13 benefitsGiven the fact that filing a bankruptcy implies a major impact on your credit rating, not to mention the big blotch it is to your self-image and reputation, many people find it extremely hard a decision to make. However, since there are a plethora of chapter 13 benefits for you to enjoy, filing for a bankruptcy under it might actually be quite advantageous both in the short as well as long-term.


Chapter 13 benefits


  • One of the most significant advantages of filing a chapter 13 is that you can save your property from foreclosure. Once chapter 13 is filed, an automatic stay is issued which prohibits the creditors from pursuing any collection activities against the debtor.
  • In the meanwhile, the debtor can renegotiate the repayment terms of the mortgage with the lender. Even past balances can be broken up into smaller amounts and repaid over time. In addition to this, chapter 13 also offers the provision of removing your second and third mortgages by a process called lien stripping.
  • Another aspect that makes the chapter 13 a better option as compared to chapter 7 is its impact on your creditworthiness. While a chapter 7 displays on your credit report for a period of 10 years, the chapter 13 bankruptcy stays there only for 7 years.
  • A lesser known benefit of chapter 13 comes in the form of dealing with your IRS debts. Under chapter 13, some taxes are considered as unsecured and dischargeable. Also, all tax penalties are paid as unsecured debts.
  • Filing chapter 13 bankruptcy can also help in consolidating your debt and managing your multiple payments by means of a single monthly payment.


While it takes around five years to repay your debts under chapter 13, it gives you the opportunity to handle your liabilities according to a more flexible set of repayment terms. Contact our team of Houston bankruptcy  lawyers for more information.