In serving as a source of information on Chapter 13 bankruptcy laws, the U.S. Court system freely acknowledges that Chapter 13 may be a better alternative solution to the problem of mounting debt other than liquidation of assets under Chapter 7. Perhaps one of the greatest benefits of Chapter 13 law as opposed to Chapter 7 bankruptcy is that it includes safeguards for homeowners. Specifically, Chapter 13 bankruptcy laws allow for debtors to manage their financial obligations while at the same time preventing banks or other lenders from foreclosing.
Even the automatic suspension of creditor collections affected by Chapter 13 law has its good points and bad points. Of course, the freedom from incessant calls, letters and other notices bordering on harassment may be well worth the hit people take with regard to their credit ratings. At the same time, Chapter 13 bankruptcy laws clearly outline that payment plans must occur over a period of at least three years, and potentially, this could be extended up to five years for special circumstances. To have to make regular payments twice a month for half a decade might be a disconcerting prospect to some.
