If your vehicle is worth less than you owe, Chapter 13 “cramdown” can reduce your monthly vehicle payment and the total you pay on the loan.
Which of the two consumer bankruptcy options is better for you if you have lots of unsecured debts depends on the kind of unsecured debts.
Stripping a mortgage from the title to your home could save you a tremendous amount of money.
How does bankruptcy treat something you bought–furniture, an appliance, or some electronics–when that thing is collateral on a debt?
Chapter 7 “straight bankruptcy” is quick, usually quite straightforward, and appropriate for more situations than you might think.
Under Chapter 13 some special creditors may be paid in full, while others are paid much less, sometimes even nothing. What determines this?
A Chapter 13 plan lets you propose what collateral you want to keep and what it is worth paying for, giving you a lot of leverage.
Bankruptcy focuses (for most purposes) on assets you own as of the moment of filing. So consider using up unprotected assets before then.
Skip the “means test” if your debts are not primarily consumer debts.
Do you absolutely need to keep your vehicle, but can’t afford the monthly payments? See if you qualify for a “cramdown.”
What if your income is too high, all your assets aren’t protected, you’re not current on your secured debts, and you can’t write off all your debts?
If you owe too much debt but still need the benefits of Chapter 13, consider “Chapter 20.”
As of April 1, you can owe more debt and still qualify for Chapter 13.
Saving the vehicle sometimes is not the best option, so Chapter 7 bankruptcy gives you a safe way out.
Chapter 7 gives you a fresh financial start by legally erasing your debts. That’s enough if your debts are simple ones.