Can A Chapter 13 Help My Credit Report?

People worry about credit and bankruptcy all the time

, and I have so many clients who feel that theyre just going to be devastated forever by a bankruptcy.

In Chapter 13, unlike Chapter 7, youre repaying and reorganizing your debt. And as a result, its reported on your credit for five years. And more to the point, your Chapter 13 is going to stay on your credit report for seven years, unlike your Chapter 7, which is going to paywhich is going to stay on there for 10 years.

So a lot of my clients in Chapter 13, they can refinance their house after theyve started a 13. That way they lower their mortgage payments. Also giving them better credit. They can reorganize their car loan if the car is more than three years old and its upside down, meaning the value is less than the loan thats on it.

So a lot of people really improve their credit in a 13. And so, yes, the answer is you can definitely help your credit with a 13.

Can I keep my toy hauler, my motorcycle, dirt bike, and toys in bankruptcy?

Yes. You know, here in Arizona its not uncommon for a lot of us to have purchased, you knowweve got great desert landscapes and lakes to go to, so you can keep in your bankruptcy, if youre filing a Chapter 13, you can keep that boat. You can keep the kids dirt bikes. You can keep your toy hauler. You can keep your RV.

And so rather than, say for example in a Chapter 7 where Id have to advise you that you need to go liquidate all of those. Start selling them. And unfortunately youre going to settle for rock bottom prices in order to quality for a 7. But in a 13, no sale is required, and you get to hold onto them. Make one monthly payment on all of your debt and still enjoy things.

So again, thats where a Chapter 13 has a lot of up side. Whereas a Chapter 7 really puts a really tight belt around your budget and your assets, a Chapter 13 does that but much less so.

by: Christy Thompson

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