There are many good reasons to consider Chapter 13 bankruptcy, including the ability to catch up on your debt over the course of your repayment plan. While it's easy to focus on the benefits of a Chapter 13 bankruptcy filing, you should also learn more about some of the potential drawbacks.
Here are four things you need to know about this type of bankruptcy:
- Your repayment plan will last three to five years: This means that you'll have bankruptcy hanging over your head well into the future.
- You pay your debts out of your disposable income: This money is used to repay creditors through your repayment plan, tying up your extra cash.
- It remains on your credit report for up to 10 years: It's never a good thing to have a bankruptcy on your credit report, but even with this present you can begin to rebuild.
- It makes it difficult to get a loan: If you don't own a home or vehicle, for example, Chapter 13 bankruptcy makes it harder to get one. As the years go by, your credit may improve, and you can then apply for new loans.
As someone considering Chapter 13 bankruptcy, it's important to compare the pros and cons for a clear idea of what you should do next.
If you're all right with working through some of these potential drawbacks, you may find yourself in position to use Chapter 13 bankruptcy as a means of improving your finances. Before you make a final decision, review the good and bad and learn more about your legal rights.
Attorney Advertising Disclaimer: Under Federal Law, we have been designated a Debt Relief Agency and we help people file for bankruptcy relief under the Bankruptcy Code. This information is not intended as legal advice and no attorney-client relationship is created. Results may vary. Results not guaranteed. Dramatization: Not actual clients in pictures and videos. -- Thomas C. McBride, attorney in Alexandria, LA.