What are the Pros & Cons of Filing Chapter 13 Bankruptcy?By W. Ron Adams | April 12, 2016 | 0 Comments
Making the decision to file Chapter 13 bankruptcy is one of the most difficult decisions you will make. Although the decision may be challenging, sometimes filing Chapter 13 bankruptcy with a bankruptcy lawyer in Northern Kentucky is the best option for you.
The advantages of filing Chapter 13 far outweigh the disadvantages. One of the primary benefits is that creditors will no longer harass you. A downside is that it will have a long-term effect on your credit report. Listed below are a few other pros and cons of filing Chapter 13 bankruptcy.
Pros of Filing Chapter 13 Bankruptcy
1. You can repay your creditors over a longer period of time. If you are behind on your current bills, this will give you time to increase your income, and change your spending habits.
2. The amount of debts that you owe can be reduced. In some instances, you will not be required to pay the full amount of the debt that you owe. Once you have fulfilled the terms of your repayment plan, creditors are not entitled to receive the full amount of the money that was owed to them.
3. You can stop the effects of defaults and missed payments on your credit report. If you are behind on your financial obligations, filing Chapter 13 bankruptcy is an effective tool to help you structure a plan to pay back your debts in a timely manner.
4. Chapter 13 allows you to keep your property as long as you are making payments. This is a good program for people who are behind on their mortgage and other secured debt.
Cons of Filing Chapter 13 Bankruptcy
1. Chapter 13 bankruptcy stays on your credit report for approximately 7 years. During this time you can work to rebuild your credit.
2. Chapter 13 bankruptcy does not eliminate certain kinds of debts. Some debts that are still owed after your Chapter 13 bankruptcy are student loans, child support, and spousal support.
3. It will take approximately 3-5 years to repay your debt. Filing Chapter 13 bankruptcy requires you to make a long-term commitment to the process.
Have you consulted with another attorney? Need a second opinion? Call us for a FREE Consultation and a fresh set of eyes with over 29 years of experience! We can review your situation, explain the differences in each bankruptcy chapter, and determine which chapter is best for you.