When you find yourself in a situation during which you are unable to keep up with debts and other payment obligations, filing for bankruptcy can provide the chance for a fresh start. Chapter 13 is one of the most common forms of bankruptcy, and it is often the preferable option for those with a reliable income who might need a reprieve in order to pay their debts.
By learning more about the specific benefits of Chapter 13 bankruptcy, you can make an appropriate decision for getting your finances back on track.
You do not have to liquidate your assets
In contrast to the process outlined through Chapter 7 bankruptcy, filing for Chapter 13 does not necessitate liquidating your assets to repay your debts. This also means that filing for Chapter 13 does not come with a risk of losing your home as long as you can afford your mortgage under the terms of your new repayment plan.
You pay for what you can afford
After filing for Chapter 13 bankruptcy, you will work with a trustee who will help you create a repayment plan in accordance with what your budget can afford. This may also include a new fixed interest rate on debts that might currently have interest you are unable to pay.
Your plan will reschedule and discharge debts
To facilitate your ability to repay secured debts during the bankruptcy period, Chapter 13 bankruptcy entails a rescheduling of payment obligations over a period of three to five years. After that period, Chapter 13 bankruptcy also discharges any outstanding and eligible debts entirely, granting you a fresh start.
Making the decision to file for bankruptcy is a milestone moment in your financial trajectory. However, Chapter 13 bankruptcy can be an opportunity for a brighter future if you approach it thoughtfully.