If you are running a business, but have lost control of your finances and you are in a situation where the debts you owe to the various creditors are much more than what you can pay off with the current income of your business. In such cases, only chapter 13 rules can save you, especially if you are also unable to get things settled with personal negotiation with the creditors. These rules of the bankruptcy code in the United State of America have been designed specifically to benefit the debtors. There can be virtually unlimited advantages of using these rules.

No Physical Mental Harassment from the Creditors

While filling bankruptcy process under the chapter 13 bankruptcy rules, you get automatic legal stay until the time your case is under the court proceedings. This period of the legal stay prohibits the creditors from forcing you to pay off the debts. They cannot even give you a call to warn you for the repayment. If they do so, you can take legal action against them. If the creditors use any means to force you for the repayment during this period, it will also make their claim in the court much weaker, and there is greater possibility that the court will give its judgment in your favor. This way, the chapter 13 rules save you from both mental and physical harassment.

Reduced Creditors’ Claim

Another great advantage of these rules of the bankruptcy laws is that you can also get the total amount of debts reduced to a much lower amount. For example, presenting your financial crisis in a prudent way, you can request the court to reduce the creditors’ claims to 25%. It means, you may propose the court and the creditors that as per your current financial situation, you are only able to pay 25 cents on each dollar. The court will review all the facts and figures and it will also talk to the creditors, and eventually it may allow you to pay at least 60 cents per dollar, which is much less than what you would actually need to pay.

The Repayment Plan

What is more, the greatest advantage of getting declared as bankrupt under chapter 13 rules is that the court asks you to make the repayment on much easier term. This way, you get a cool and relaxed financial environment and much needed time to regain control of your finances. You do not need to pay the debts as lump sum amount. You can make it in easy monthly installments.

As per the chapter 13 rules, the court also appoints a trustee for you, who will work with you hand in hand, in order to put your business back on a profitable track.