As you compare the details of Chapter 13 and Chapter 7 bankruptcy, you'll soon come to realize that there are a variety of differences.
With Chapter 13 bankruptcy, you propose a repayment plan to the court. This gives you the opportunity to repay some or all of your debt over the period of three to five years.
While this is a different approach than Chapter 7 bankruptcy, it still comes with a variety of potential high level benefits. These include but are not limited to the following:
- Avoid foreclosure. If you are facing foreclosure, Chapter 13 bankruptcy may be just what you need to save your home. Once you file, the automatic stay goes into play, which stops the foreclosure process for the time being. From there, you can determine if there is a way to catch up on delinquent payments through your repayment plan.
- A Chapter 13 bankruptcy will only stay on your credit report for seven years. We use the word "only" because a Chapter 7 will remain on your credit report for 10 years.
- The opportunity to lower some of your payments. For example, you can reschedule most types of secured debt (not your primary mortgage) to be repaid over the life of your repayment plan. This often leads to a lower payment, thus making it easier to keep up.
With these types of benefits, it would be worth your time to learn more about Chapter 13 bankruptcy and the process you must follow if you want to file.
As you learn more, you can make up your mind as to whether or not a Chapter 13 bankruptcy is the best way to improve your finances.
It's never easy to decide in favor of bankruptcy, but in some situations it may be the best option available.
Once you file, you can turn your attention to the process that follows. It may not be easy, but, in the end, bankruptcy can point some individuals in a positive direction in their financial life.