You’ve tried everything to steady your finances and avoid bankruptcy, but have come to the conclusion that this is the best way to secure a better financial future.
Should you learn that you don’t qualify for Chapter 7 bankruptcy, it’s time to turn your attention to Chapter 13 bankruptcy.
Unlike Chapter 7 bankruptcy, in which you can discharge some or all of your debts, the same doesn’t hold true with Chapter 13 bankruptcy. This type of bankruptcy allows you to repay your debts through a repayment plan that typically lasts from three to five years.
Even with this distinct difference, there are many benefits of filing Chapter 13 bankruptcy:
- Restructure your debt: With the opportunity to restructure your debt, you can end up with lower payments when everything is said and done. Furthermore, you’re in position to retain your assets without losing equity.
- Stop creditors: You’re tired of hearing from creditors, both on the phone and through the mail. Fortunately, once you file for Chapter 13 bankruptcy, the automatic stay will bring this to an end. This gives you time to breathe as you move through the process with the idea of improving your financial future.
- A repayment plan that suits your situation: You’re not forced into a repayment plan that you can’t comfortably manage.
Are there any disadvantages?
There’s no denying the fact that Chapter 13 bankruptcy can improve your financial future, but there are some things you need to keep in mind as you prepare to go down this path:
- Chapter 13 bankruptcy does not discharge your debts
- Chapter 13 bankruptcy remains on your credit report for seven years (this is three years fewer than Chapter 7 bankruptcy)
No two people are facing identical financial circumstances, so only you can decide if Chapter 13 bankruptcy is something to consider.
If you realize that it could benefit you now or in the near future, it’s time to compare the pros and cons and determine what comes next. You may realize that Chapter 13 bankruptcy is the best way to improve your finances, thus allowing you to live the life you’ve always wanted.