There are times when it is better to file a Chapter 13 bankruptcy than a Chapter 7 bankruptcy. If you have a mortgage or car loan that you are behind on and you want to keep the house or the car, you may need to file a Chapter 13 bankruptcy. If you have significant equity in a house, car or other asset, you may need to file a Chapter 13 bankruptcy to protect that equity. If your income is above a certain level based on the size of your household, you may be required to file a Chapter 13 bankruptcy.
However, you do not have to file a Chapter 13 bankruptcy simply because you own a house or have a car loan. There are some attorneys who will tell virtually every client that they need to file a Chapter 13 bankruptcy regardless of their circumstances. I have even heard of attorneys who go so far as to tell a client that they have to file a Chapter 13 because they own a house or because they have a car loan. This is not the case. If you are advised that you have to file a Chapter 13 simply because you have a house or a car loan, you need to make sure that you understand the reason for the Chapter 13. If you are unclear about why you have to file a Chapter 13 bankruptcy, you should seek a second opinion.
It is normally less expensive to file a Chapter 13 bankruptcy up front since most attorneys collect their attorney fees from the Chapter 13 plan payments. However, the attorney fees for a Chapter 13 are normally much higher than for a Chapter 7 overall. Before you file a Chapter 13, you need to understand how much you will have to pay if you decide later that you want to convert your case to a Chapter 7.
If you have been told that you have to file a Chapter 13 bankruptcy and you want a second opinion contact Hampton Roads Legal Services at 757-320-2010 for a free consultation on what is best for you.