Gig Harbor lawyer, Gig Harbor attorney, Tacoma lawyer, Tacoma attorney, Seattle lawyer, Seattle attorney

Chapter 13 offers individuals a number of advantages over liquidation under chapter 7.  Perhaps most significantly, chapter 13 offers individuals an opportunity to save their homes from foreclosure.  By filing under chapter 13, individuals can stop foreclosure proceedings and may cure delinquent mortgage payments over time.  Nevertheless, they must still make all mortgage payments that come due during the chapter 13 plan on time.  Another advantage of chapter 13 is that it allows individuals to reschedule secured debts (other than a mortgage for their primary residence) and extend them over the life of the chapter 13 plan.  This strategy may lower the debtor’s monthly payments.  Chapter 13 also has a special provision that protects third parties who are liable with the debtor on "consumer debts."  This provision may protect co-signers.  Finally, chapter 13 acts like a consolidation loan under which the individual makes the plan payments to a chapter 13 trustee who then distributes payments to creditors.  Individuals will have no direct contact with creditors while under chapter 13 protection.

The discharge in a chapter 13 case is somewhat broader than in a chapter 7 case.  Debts dischargeable in a chapter 13, but not in chapter 7, include debts for willful and malicious injury to property (as opposed to a person), debts incurred to pay non-dischargeable tax obligations, and debts arising from property settlements in divorce or separation proceedings.