Is Chapter 13 Bankruptcy Ideal For Your Situation?

Filing Chapter 13 bankruptcy is considered to be one of the most favorable types of bankruptcy for many reasons. Although you will be required to repay debts instead of having them cleared, this will allow you to keep your assets instead of handing them over to be sold.

The new payment plan will be free from high interest rates, and in some cases completely interest free. A personal advantage to Chapter 13 bankruptcy is that instead of having your debts cleared, you get the satisfaction of making the responsible effort to repay the money that you owe.

Chapter 13 bankruptcy has no limit on the times that you can file, which is a comforting option for anyone who has difficulties with managing their debt. This does not mean that it is a responsible way to handle your bills because bankruptcy is supposed to be considered only as a last resort, but Chapter 7 can only be filed every six years. Falling behind on your financial responsibilities can happen to anyone. The one thing that most people consider when thinking about bankruptcy is losing their home, vehicle, and other valuable assets that have been acquired with hard-earned money. Chapter 13 will give you the opportunity to repay your debt so that you can eventually start over, and without the added difficulty of losing your properties.

There are some circumstances that could put you at a disadvantage by filing for Chapter 13 bankruptcy instead of Chapter 7. You are required to make set payments on a schedule so that your debt will be cleared during a certain period of time that is set by the court. One missed payment will result in the immediate dismissal of your case. Chapter 7 is better for individuals who know that they will not be able to make payments due to other expenses or a low income. Chapter 7 also takes effect much faster because Chapter 13 bankruptcy could have you repaying debt for years rather than being cleared within a few months.

The most common types of bankruptcy filed are Chapters 13 and 7. Chapter 7 will give you a fresh start on your finances, but the price to pay is also enduring a fresh start on your accumulated assets. If you do not want to deal with a complete lifestyle change, choosing Chapter 13 will not require any changes except to make set payments when they are due. There are pros and cons with both, but Chapter 13 is the best option for those who are willing, as well as able, to repay their accumulated debts slowly over time.