Understanding Chapter 13 Bankruptcy’s Benefits
Many people feel dejected when they file Chapter 13 bankruptcy because there is still a stigma that bankruptcy is a sign of failure — however, this is far from true. Bankruptcy is a chance for you to regain control of your future, and filing shows that you are taking responsible steps to improve your financial situation.
Some of its benefits include:
You Do Not Have To Liquidate Assets
In Chapter 7, debtors must liquidate, or sell, their nonexempt assets to repay their creditors. Chapter 13, however, allows debtors to set up a repayment plan instead of selling many of their possessions.
It Can Prevent Foreclosure And Repossession
When someone files Chapter 13 in Texas, the court automatically stops repossession and foreclosure proceedings. Filers can make up for missed mortgage and car payments by working out a payment plan based on what they can afford. You will be able to keep your house, and potentially make lower mortgage payments each month.
It Appears On Your Credit Report For Less Time
A Chapter 13 bankruptcy remains on credit reports for only seven years, whereas Chapter 7 remains for 10 years. This means that Chapter 13 will have less of an impact on your credit score, and you can start to rebuild credit immediately.
You Can Reschedule Secured Debts
When someone files Chapter 13, they can reschedule their secured debts, extending them over the course of three to five years. This makes the monthly minimum payments significantly lower and more affordable.
Learn More About The Benefits Of Chapter 13
At William H. Lively, Jr. WHL, PLLC, we understand that the thought of filing Chapter 13 seems overwhelming. Our attorney can discuss the process with you, go over the benefits in depth and help determine whether declaring bankruptcy is right for you.