If your personal finances are such that you have found yourself struggling to meet your monthly obligations for loans, credit cards, and even your mortgage payments, you are likely in search of relief. A Chapter 13 bankruptcy is a type of bankruptcy that allows your debt to be rescheduled so you can make affordable payments and pay off your debt. The following are just a few things that it may do for you.

A Chapter 13 filing can save your house

Although there is no way you will have any of the principle discharged from your mortgage, it is possible that a judge may tack on a payment or two to the end of the mortgage that you have fallen behind on. The same is true of interest and other fees. The key element for having this done is to show that you can make your monthly mortgage payments. It is simply an issue of falling behind and not being able to catch up.

A Chapter 13 filing can help with back taxes

This is especially true with income taxes. You may be hopelessly behind and still find yourself paying on a tax bill from the past. A bankruptcy judge can take all the back taxes you owe and include them in the payment plan. Once you are finished making your last payment, you will have paid off your back taxes. You will need to keep your current taxes up to date.

A Chapter 13 filing allows you to pay what you can afford

The problem with debt is when you begin to fall behind, it is difficult to catch up. Much of this is due to interest and late fees. Unlike debt repayment programs, a judge can look at your income and assets to determine what you can afford to pay back. This may mean only paying back the principle, but it may mean a reduction in the principle. But it will not be open-ended. In other words, you will not be paying your debts forever. A Chapter 13 bankruptcy means there will be a specific number of years and months until your debt is paid.

A Chapter 13 filing means becoming debt-free

Of course this will not happen right away, but a judge will determine how much of your current debt you need to pay back along with a time frame for these payments. Every month, you will be responsible for a specific amount of money that will be paid to a trustee. This person takes the money and pays your creditors in the manner prescribed by the judge. But when the last payment is made, you will be able to say that you are debt-free.

If you find yourself hopelessly behind on your debt, you should consult with an attorney about debt relief via a Chapter 13 bankruptcy.