Chapter 13 bankruptcy offers many people the chance to be free from creditor actions and to pay back their debts over a reasonable timeframe. While filing for this bankruptcy chapter offers debtors some unique opportunities, the challenges should not be underestimated. Undertaking a Chapter 13 bankruptcy requires commitment and dedication.
If you are considering filing for Chapter 13 bankruptcy, you should take the time to understand the entire process, as well as the challenges involved so that you can make an informed decision.
Maintaining a steady income
Chapter 13 bankruptcy is essentially a repayment plan that takes place over three to five years. The terms of the plan will be based on your monthly income as well as the expenses that you are subject to, and the cost of living. Therefore, to be successful, you must be able to maintain your income over an extended period of time.
Making sacrifices regarding your lifestyle
If you are used to taking frequent lavish vacations and shopping for expensive items in the mall, your lifestyle will have to change significantly when filing for Chapter 13 bankruptcy. Almost all of your disposable income will need to be dedicated to repaying your debts.
Keeping motivated in the long-term
Being so frugal can be difficult to stick to in the long term, and this is why not everyone successfully completes a Chapter 13 bankruptcy. However, if you do complete the bankruptcy, any remaining debts will likely be completely cleared.
If you are considering filing for bankruptcy, you should try to research all options so that you have a comprehensive overview.