Many consumers who file for bankruptcy do so for a fresh start. They want nothing more than to wipe clear their debt, start at square one and hopefully make the most of their second chance. To get that, Chapter 7 bankruptcy is often their first choice.
However, Chapter 13 bankruptcy is also beneficial in many ways. While it doesn’t provide the same immediate fresh start as Chapter 7, don’t look down on it. Here’s what it can do for you:
- Reschedule secured debts: Thanks to the repayment plan, you can reschedule secured debts over a period of three to five years. This often results in a lower monthly payment, which is beneficial to you in the long run.
- Avoid foreclosure: There are many reasons to file for Chapter 13 bankruptcy, with the stopping the foreclosure process at the top of the list for many consumers. Not only does a filing halt foreclosure proceedings, but you may also be able to make up missed payments to get back on track.
- Reduced impact on your credit: When it comes to your credit history and credit score, there’s no denying the fact that Chapter 13 bankruptcy is harmful. However, since it only remains on your credit report for a period of seven years, it’s less harmful than Chapter 7, which stays in place for 10 years. This doesn’t sound like a big deal now, but you’ll be glad this is the case down the road.
These are just a few of the many reasons to strongly consider Chapter 13 bankruptcy if you find yourself in financial trouble. It’s not the solution to every money related problem, but it never hurts to learn more about your options and consider if it could help bring stability to your life.
If you decide in favor of Chapter 13 bankruptcy, learn more about the process. This includes how to protect your assets, what you need to get started and the steps you can take to ease your stress as you repay creditors through your repayment plan. The right approach will help you protect your legal rights, thus getting everything you want.