Would a Chapter 13 Bankruptcy Be Good for Me?

On the surface, Chapter 13 bankruptcy may appear more favorable than Chapter 7 bankruptcy because it allows a debtor to protect their valuable assets from foreclosure or repossession. However, just because this is a known benefit does not necessarily mean that declaring this bankruptcy type will be a beneficial decision for you. With that being said, please read on to discover whether filing for Chapter 13 bankruptcy would be a good idea for you and how a seasoned Louisville, Kentucky Chapter 13 bankruptcy lawyer at Schwartz Bankruptcy Law Center can guide you on the best option.

Would filing for Chapter 13 bankruptcy be good for me?

The reason why, in a Chapter 13 bankruptcy, your valuable assets do not get foreclosed upon or repossessed and liquidated to pay back your outstanding creditors is because you will be legally obligated to handle these payments yourself. That is, as a Chapter 13 debtor, you must pitch and get a repayment plan approved by the Kentucky bankruptcy court. This plan essentially makes a schedule for reimbursing your creditors over the span of three to five years.

And so, before you file a petition for this bankruptcy type, you must ask yourself whether you can realistically handle paying off all your debt within the next five years. To seriously reflect on this, you must consider the amount of debt you possess, the extremity of their interest rates, the cost of your necessary daily expenses, the amount of income you take in, and much more. Rest assured, one of our experienced lawyers will help conduct this financial analysis and come up with a reasonable conclusion during your free initial phone consultation.

What other debt relief option might work better for me?

You do not want to commit to a Chapter 13 bankruptcy process if you are not confident you can complete it. If your case is dismissed prematurely, you may find yourself in a worse financial situation than when you started. With that, you may feel more comfortable pursuing a Chapter 7 bankruptcy petition. You must ensure, though, that you meet the qualifying criteria for this bankruptcy type. Specifically, you must pass the means test and fall below the state of Kentucky’s median income for your household size.

Your lawyer can help you do the right calculations for the means test. But also, they may steer you towards an alternative debt relief option if they believe bankruptcy is too drastic a measure for your financial circumstances. For example, rather than representing you in a bankruptcy case, they may offer to negotiate with your outstanding creditors on your behalf. Here, they may successfully settle on paying a lower, lump-sum payment to close your account with them once and for all.

Better yet, they may give you the assurance you need to tackle your debts independently. This may be easily resolved through liquidating your non-essential assets, eliminating your non-essential expenses, getting a higher-paying job/a secondary source of employment, etc. Before you find yourself in an even worse position, you must retain legal representation from Schwartz Bankruptcy Law Center. A competent Louisville, Kentucky consumer bankruptcy lawyer from our law firm will guide you on what to do.