With so many benefits of Chapter 13 bankruptcy, you may assume that this is the best way to rid yourself of debt, start fresh and feel better about the future.
While you may come to find that Chapter 13 bankruptcy is exactly what you need, don't rush into the process before learning more about the potential disadvantages.
Here are a few things to think about:
- Chapter 13 bankruptcy will not have any impact on student loan debt, child support payments or alimony
- It can take as long as five years to repay debts after filing for Chapter 13 bankruptcy
- You don't get to keep all of your disposable income in the future, as some of it will be used to repay your debts
- A Chapter 13 bankruptcy typically remains on your credit report for a period of seven years
- You will lose all of your credit cards once you file
- It can be a challenge to secure a loan, such as for a car or home, after filing for Chapter 13 bankruptcy
- Once you declare Chapter 13 bankruptcy, it can be more difficult to file for Chapter 7 in the near future
Your job is to understand the potential disadvantages of Chapter 13 bankruptcy, as well as the benefits, to ensure that you are making the best possible decision for you and your finances.
If you decide that there has never been a better time to file, focus on the process and your legal rights. This will help you take the right steps at the right time, thus putting you in position for success.
Source: FindLaw, "Pros and Cons of Declaring Bankruptcy Under Chapter 13," accessed June 07, 2018