Making the decision to move forward with declaring bankruptcy is undoubtedly a difficult step. A lot is at stake, including your future credit, reputation, and even your self-image. However, declaring bankruptcy is often necessary to begin a new, clean slate and to make the calls and letters end.
If you are unsure if a Chapter 13 bankruptcy is the right option for your financial future, take a moment to read our lists of pros and cons before you settle on a course of action.
The Pros of a Chapter 13 Bankruptcy
- Chapter 13 trustees might be flexible regarding the terms of your structured payments. Additionally, under a Chapter 13 bankruptcy, you might be able to stretch out your payments, reduce the number of payments you make, or give up an item of property that you are making payments on. Once you successfully complete your repayment plan, individual creditors can no longer obligate you to pay them in full.
- As you continue to make payments under a Chapter 13 plan, you will be able to retain possession of the property you are making payments on.
- You can only file under Chapter 7 bankruptcy once every 6 years, but you can always get another Chapter 13 plan if you suffer another financial blow. However, keep in mind that every time you file for bankruptcy, it will appear on your credit record.
- A Chapter 13 bankruptcy will remain on your record for up to 10 years, but missed debt payments, repossessions, defaults, and lawsuits could be more complicated and harmful.
- As long as the Chapter 13 plan allows for full payment, your co-signers will be immune from the efforts of creditors.
The Cons of a Chapter 13 Bankruptcy
- It could potentially take up to five years for you to repay debts under a Chapter 13 plan.
- You must pay for your debts using disposable income, which is essentially any income you have left after all necessities, such as food and shelter, are paid. Any other additional cash will be tied up to the repayment plan.
- You will not be allowed to file for a Chapter 7 bankruptcy if you went through bankruptcy proceedings under Chapter 13 within the past six years.
- You might still be obligated to pay off some of your debts even after bankruptcy proceedings are successfully completed.
Reach out to the Law Offices of Marshall D. Schultz
Does your debt currently outweigh your ability to pay? If so, you can possibly find relief through filing a Chapter 13 bankruptcy and, at The Law Offices of Marshall D. Schultz, our bankruptcy attorneys can help you undertake this difficult step. We are dedicated to representing clients who are determined to get out of debt and would be honored to assist you through this process.