When struggling with financial problems, it can be difficult to determine the best way forward. You may worry that in response to the financial issues that you are facing, you will make a wrong move that will leave you in a worse position. This is why you must take the time to understand the different options and how they will apply to your specific circumstances.
Chapter 13 bankruptcy is usually a great option for debtors who have a steady income. By taking action under a repayment plan, they have a realistic option of being able to get a fresh start from their debts. The following are some ways that Chapter 13 bankruptcy can be beneficial to many debtors.
It’s possible to keep your home or pause foreclosure proceedings
Many people who are struggling financially cite the prospect of losing their home as one of their biggest fears. When filing for bankruptcy, an automatic stay will be put into place. This will mean that foreclosure proceedings will be temporarily halted. Through the repayment plan, you may also be able to catch up with missed mortgage repayments.
It minimizes the impact to your credit score in comparison to other bankruptcy filings
Seeing a drop in your credit score after a bankruptcy is almost inevitable. However, a Chapter 13 bankruptcy filing will only stay on your credit report for 7 years, as opposed to Chapter 7 bankruptcy, which stays on a person’s credit score for 10 years.
It is a manageable way to deal with debt
A Chapter 13 repayment plan takes into account your average monthly income in addition to your expenses. This helps make it possible to design a debt repayment strategy that is manageable and realistic for you in the long term.
It doesn’t require that you have a low income
Many people cannot file for Chapter 7 bankruptcy because their income is determined to be too high. Income should never be a problem for those wanting to file for Chapter 13 bankruptcy. Having a stable income is required to file.
If you want to make the best financial decision for yourself and your family, consider the benefits of filing for Chapter 13 bankruptcy. Taking swift action could help you gain control of your finances again.