There are scenarios when you are current on your home mortgage and are dealing with other home-related debts where Chapter 7 works well.
Here's an example why to keep an open mind about filing under Chapter 7 vs. Chapter 13. Slightly different facts can make all the difference.
Filing a Chapter 7 case stops foreclosure of your home temporarily, helping you gather funds for your transition to your next housing.
If you are behind on your mortgage, and are thinking of selling your home, you can often delay selling for many months or even for years.
If you own a home with a qualifying 2nd or 3rd mortgage, one of the best reasons to file a Chapter 13 case is to "strip" off that mortgage.
If behind on property taxes on property with a mortgage, that likely puts you in default on the mortgage itself. Chapter 13 can fix this.
If you've fallen behind on your mortgage, it's very hard to catch up. It may even seem impossible. Chapter 13 makes it possible.
Here's an example of how Chapter 13 can allow you to hold onto your home but then change your mind about it later.
Both Chapter 7 and Chapter 13 can wipe away judgment liens. But doing so under Chapter 13 can be better when used with its other benefits.
If you are behind on your mortgage and want to sell, you may be able to delay the home sale for years and pay the arrearage out of the sale.
You have much, much more time to catch up on unpaid mortgage payments, as well as any unpaid property taxes.
Chapter 7 strengthens your hand with your secured debts. But Chapter 13 can be much stronger. Starting with a more potent "automatic stay."
Whether you can keep other real estate depends first on whether it's "exempt."
If your second (or third) mortgage is not backed by any equity in your home, you can "strip" that mortgage off your home's title.
Chapter 13 gives you much more time to catch up on your unpaid mortgage payments. That can be reason enough choose this option.