I referred to Chapter 13, bankruptcy, as the great equalizer.
Why is it the great equalizer? Because it gives the filer an upper hand and leverage against the creditors. It does that in two different ways.
First of all, it can reduce the amount of debt that you owe.
Secondly, it gives (you) a payment plan over three to five years. Because debt such as credit cards, personal loans, can be reduced, those monies can be allocated to things such as mortgage arrears, tax arrears that take a priority. And the filer will actually get more time to pay off said mortgage arrears or tax arrears, and of course, a reduction to (what) I would say less important debts or less priority debts – such as credit cards or personal loans. That, unfortunately, take up a larger percentage of the average household than they should.
So we want to reduce those unsecured debts and that money shall be allocated to what is actually most important to the filer.
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