Many people in financial distress shy away from Chapter 13 bankruptcy because they don't want to deal with a repayment plan that typically lasts from three to five years. Instead, they'd rather file for Chapter 7, as it's a faster process that results in the discharge of debt.
If you find that Chapter 13 bankruptcy is your only option, it's well worth your consideration. Here's why you should give it a second look:
- Less impact on your credit report: A Chapter 13 bankruptcy will remain on your credit report for seven years. While this is a long time, it's three years less than a Chapter 7 filing.
- Avoid foreclosure: A Chapter 13 bankruptcy will stop foreclosure proceedings, thus allowing you to better assess your situation without fears of losing your home. Best yet, during your filing, you can consider your options for making up missed payments, which may allow you to stay in your home.
- Lower monthly payments: Through Chapter 13 bankruptcy, you can reschedule some or all of your secured debts. By stretching them over the span of your repayment plan, you may end up with lower monthly payments.
You can't decide for or against Chapter 13 bankruptcy until you first understand the pros and cons. At that point, it's easier to see if this will improve your current situation while making it easier to live your best life in the future.
If you're all in on Chapter 13 bankruptcy, learn more about the bankruptcy process itself, your legal rights and the steps you can take to put yourself on the right path.