There are two primary benefits of choosing Chapter 13 bankruptcy
. First, if you have a second or third mortgage on your home, those liens may be stripped. This means that the lienholder no longer has an interest in the property, and you are no longer required to pay those creditors. You may be entitled to strip liens from your home as long as the value of your home is less than what you owe on your first mortgage.
The other benefit is that you get an automatic stay of all creditor contact. What this means it that creditors can no longer call you
or send collection letters. The stay will generally be kept in force as long as you make you repay creditors as agreed and otherwise comply with bankruptcy court orders.
It is important to remember
that Chapter 13 bankruptcy will not eliminate all of your debts. If you have student loan debt, owe back taxes or back child support, that debt will still need to be repaid. You should also be aware that you may not be able to obtain new credit without the court's permission until your prior debts are discharged.