Many people looking into bankruptcy wonder about the differences between Chapter 7 and Chapter 13 bankruptcy. You can check out the videos on the site for more information; but in short people receive the most benefit of a chapter 13 bankruptcy when they are behind on debt that is secured. This means cars, houses, boats etc. where you have a debt that you are paying on to keep the item.
Loan modifications in recent years have produced a horrible environment where people they are current on their home loan but the bank still declares default and the person is all the sudden 20 to 40 thousand dollars behind. If the person wanted to stay in the home, the chapter 13 will allow you to stop the foreclosure and allow you to make up the payments throughout your Chapter 13 plan. The same principle applies in car or boat situations.
Matt Wadsworth is a partner at Arnold, Wadsworth & Coggins Attorneys and practices bankruptcy law in Salt Lake City and Ogden, Utah.
