Many people who are interested in bankruptcy immediately turn their attention to Chapter 7, as they feel this is the best way to improve their situation.
While there are many benefits of Chapter 7, including the ability to quickly put the process in the past (typically within four to six months), you could soon find that you don't qualify.
In this case, you'll want to learn more about the many benefits of Chapter 13 bankruptcy.
Here are some of the many reasons why Chapter 13 could be just what you need to get your finances back in order:
- Avoid foreclosure. Are you concerned that your mortgage lender will repossess your home in the near future? With a Chapter 13 bankruptcy filing, you'll get the help you need to save your home. In addition to stopping foreclosure proceedings, you may be able to make up missed payments through your repayment plan.
- Less impact on your credit report. Yes, a Chapter 13 bankruptcy will remain on your credit report for seven years. However, when compared to 10 years for a Chapter 7 filing, this is much better.
- Potential to lower some of your secured debt payments. With the ability to reschedule secured debts over the term of your repayment plan, you may end up with a lower payment.
These are far from the only benefits of Chapter 13 bankruptcy, but they are among the best. When you keep these in mind, it's much easier to decide if filing would be in your best interest.
To ensure yourself of making the right decision, compare the pros and cons of Chapter 13 bankruptcy against the finer details of Chapter 7. Also, take into consideration any other financial strategies that could help you escape trouble, such as credit counseling.
As you learn more about Chapter 13 bankruptcy, your legal rights, and the way the process moves forward, you'll find it easier to make a decision you can live with.