A personal bankruptcy claim can a be a saving grace for people that are on the ropes in terms of their finances, and it can be particularly useful for those that have exhausted more traditional methods of financial repair. Each and every year, thousands of people must make the tough decision to file for bankruptcy and they must also choose between one of two options – Chapter 7 and Chapter 13. Although Chapter 7 is the most common form of filing, as it’s essentially designed for people with minimal assets, Chapter 13 can often be a better option depending on the financial position of the debtor.

If you think that Chapter 13 might be the best option for you, it’s important to consider the following points, which may sway your decision:

1.    This is generally the best option for people that have important assets that they would like to keep. Essentially, Chapter 13 constitutes the formation of a debt repayment plan, allowing debtors to shield assets such as homes and other real estate from creditors.

2.    Chapter 13 is the best option for preventing and for outright stopping foreclosure proceedings on a home. This assumes that the debtor can still make on-time payments during the bankruptcy process.

3.    This form of bankruptcy offers an effective method for consolidating (or rescheduling) secured forms of debt, extending the debt over a 3-5 year period.

4.    Offers protection to third party cosigners so that they are not negatively affected by the financial mishaps or past decisions of the debtor. This is important when the goal is to maintain a healthy relationship with the people that are close to you.

As you can see, Chapter 13 certainly has some advantages of Chapter 7 protection, though it’s important to understand if these advantages apply to you. For more information on claiming bankruptcy and what type might be most advantageous to you, it’s critical that you seek the advice of a qualified bankruptcy attorney.