Though you may be struggling to pay off your mortgage payments and other debts, you may still be unsure as to whether filing for bankruptcy is a wise decision. Everyone’s financial situation is different, so a bankruptcy filing may not be best for everyone. That said, continue reading to learn the advantages and disadvantages of Chapter 13 bankruptcy and how an experienced Louisville, Kentucky Chapter 13 bankruptcy lawyer at Schwartz Bankruptcy Law Center can help make this assessment.
What are the advantages of filing for bankruptcy?
First of all, with a Chapter 13 bankruptcy, you will be able to take your debts and reorganize them into a repayment plan that will last three to five years. During this time, you will make your payments to a bankruptcy trustee, who will then transfer the payments to your creditors.
With that being said, some advantages come with this reorganization bankruptcy, and they are as follows:
- You will be about to stretch out your debt payments by a schedule that better suits your current financial situation.
- You will be able to reduce the amounts of your payments by an amount that better suits your current financial situation.
- You will be able to control what property you give up that you no longer wish to make payments on.
- You will be able to follow this repayment plan all while the bankruptcy courts restrict creditors from pursuing collection activities.
- Once complete, you will no longer be personally liable for the payment of your dischargeable debts.
What are the disadvantages of filing for Chapter 13 bankruptcy?
With great advantages come considerable disadvantages. And so, you should keep the following points in mind before making your final decision:
- You will not be able to discharge certain debts (i.e., student loan debt, mortgage lien, etc).
- You will not be able to discharge your alimony and/or child support obligations.
- You will not be able to improve your credit score for a certain time after.
- You will not be able to secure a credit card for a certain time after.
- You will not be able to secure a mortgage for a certain time after.
- You will not be able to file for Chapter 7 bankruptcy for six years after your proceedings.
On top of all this, you will not be able to file for Chapter 13 bankruptcy in the first place if your previous Chapter 7 or Chapter 13 case was dismissed within the past 180 days. Nonetheless, you may believe that the above are small tradeoffs if it means getting the opportunity for a financial refresh. If you are still unsure about which avenue to pursue, then you should schedule an initial consultation with a skilled Louisville, Kentucky consumer bankruptcy lawyer. Rest assured, we will know what to do.