It is also known as “wage earner” bankruptcy, since you should have a regular revenue stream to be able to apply for Chapter 13 bankruptcy. The reason being in Chapter 13 bankruptcy, you might be repaying the money you owe as time passes, according to a payment plan, in the place of wiping them all away, such as a Chapter 7 bankruptcy.
Good reasons for Chapter 13:
- You intend to stop a property foreclosure or even a repossession to be able to repay the arrears over five years.
- You don’t be eligible for Chapter 7 as you make way too much earnings (you failed the Means Test).
- You don’t be eligible for Chapter 7 since you have assets worth significantly more than the exemption restrictions and you also don’t want to liquidate those assets.
- You need to “strip down” a mortgage that is second your house is really so far under water that there surely is not really sufficient equity to cover 1st home loan in full.