Many people will be judgmental of those who need to file bankruptcy, but the truth is that this is often very unfair. A lot of the time, people end up having to file bankruptcy because of circumstances that are beyond their control. For example, someone can end up in the hospital for several months unexpectedly, losing out on a lot of income that they expected to earn that year. In that situation, sometimes they end up having no choice but to file bankruptcy after their financial situation has been destroyed.
If you do not know a lot about chapter 13 bankruptcy, it is possible that you have questions about it. For example, you might wonder, where can I find a good chapter 13 attorney? What are the advantages of chapter 13 over chapter 7? What are some notable bankruptcy differences between 7 and 13? Can I file chapter 13 bankruptcy myself? Can you keep your house and car in chapter 13? If you have any of these questions or others, it would be a good idea for you to talk to chapter 13 bankruptcy attorneys who will be able to give you the information you need.
If you are an individual hoping to find a solution for your overwhelming debt, you’re likely considering the possibility of filing bankruptcy. And while Chapter 7 bankruptcy is by far the most popular type of bankruptcy, you might be wondering whether the alternative — a Chapter 13 bankruptcy — would serve you better.
But are you really making the right decision by seeking out Chapter 13 bankruptcy help? Here are the biggest pros and cons of the Chapter 13 bankruptcy timeline that you absolutely need to know:
Pro: Chapter 13 bankruptcy allows you to repay your debts
Many people feel uncomfortable with the idea of casting off their debt and never paying it back, which is what happens in a Chapter 7 bankruptcy. In contrast, Chapter 13 bankruptcy helps you fulfill any moral obligation you may have by allowing you to pay back your debts according to a court-approved repayment plan. These bankruptcies often allow flexible repayment terms, giving you a plan that works for your income and finances.
Con: It can be several years before you’re finished with your bankruptcy
Unlike a Chapter 7 bankruptcy, which usually just takes six months or so to complete, it can take as much as five years for you to finish the repayment plan set up in your Chapter 13 bankruptcy. If you don’t want to spend that much time going through a bankruptcy, you might be better off filing Chapter 7 instead.
Pro: You get to hold on to your property
One of the major drawbacks of Chapter 7 bankruptcy is the fact that filers must surrender most of their assets and property to the court in order to repay the debt they’re discharging. However, since you will be repaying your debt in a Chapter 13 bankruptcy, you won’t have to give up any of your property or belongings.
Con: A Chapter 13 bankruptcy will cripple your credit — at first
Chapter 13 bankruptcy helps you recover financially, but at a price — it will remain on your credit report for 10 years after you file bankruptcy, making it extremely difficult to be approved for credit and loans at first. However, with good financial habits and on-time payments, it’s very possible for you to rebuild your credit score in time.
Want to know even more about getting help with filing bankruptcy with a Chapter 13 bankruptcy attorney? Ask us anything about the bankruptcy process in the comments below this article. To learn more, read this.