Dealing with overwhelming debts can feel extremely stressful, and can ignite panic or denial for many. Panicking about debt can be a bad thing to do because it can lead to making irrational decisions. For example, some people decide to take out high-interest loans when worrying that they are unable to pay their bills. In addition, being in denial can be equally destructive. Those who bury their head in the sand can get deeper into debt.
This is why it is so important to face up to your financial situation and to calmly consider the options that you have at your disposal. A common course of action for debtors is filing for bankruptcy, and there are several bankruptcy options that you will have as an individual debtor. Chapter 13 bankruptcy tends to be a popular option. The following blog will address some reasons why Chapter 13 bankruptcy could be the best bankruptcy option for you.
Your repayments will become manageable
Chapter 13 bankruptcy is often referred to as a wage earners plan because it is essentially a repayment plan that is spread over three to five years. It makes it possible for previously unmanageable debts to be spread out over time, simultaneously halting all collection efforts from creditors. The repayment plan is designed based on your income and expenses, so it will always be realistic and affordable.
You can avoid losing your home
Those filing for Chapter 7 bankruptcy often lose their home, because they are forced to liquidate the majority of their assets in order to pay back their debts. This can be a major disadvantage for many, especially for families. When filing for Chapter 13 bankruptcy you will be able to keep your home and halt any foreclosure proceedings that are in place.
Your credit report will suffer less
Chapter 13 bankruptcy stays on your credit report for 7 years, but Chapter 7 bankruptcy stays on your report for 10 years. From a credit reporting perspective, Chapter 13 bankruptcy is advantageous.
If you want a fresh start from your debts, you should take action by learning more about debt solutions, including the possibilities that a Chapter 13 bankruptcy filing could provide.