The Incomparable Qualities That Make Chapter 13 Bankruptcy Stand Out
There are numerous misconceptions about declaring bankruptcy. For instance, some people erroneously believe that doing so signifies failure. This is why they may hesitate to file bankruptcy even when they're unable to pay back their debts. However, it is important to note that bankruptcy provides numerous benefits, including helping applicants improve their financial circumstances. This is especially the case when the applicant opts for Chapter 13 bankruptcy. Those who file for this Chapter enjoy numerous benefits, including the ones discussed below.
It Protects Your Property
Declaring bankruptcy can be suitable in various financial situations, e.g. if creditors threaten to seize your property to recover their debt. In such a situation, filing for Chapter 13 bankruptcy can help you to stop the foreclosure and repossession proceedings. After filing, creditors who may have been planning to acquire your property must wait for the court's ruling before taking further action. This gives you time to prepare a repayment plan and present it in court for scrutiny.
A legal advisor can help you prepare a viable monthly payment plan that is acceptable to the court and creditors. This will increase your qualification chances and make it easier to repay your debt. More importantly, you will get to keep personal belongings that you could have otherwise lost to your creditors.
It Impacts Your Borrowing Power Less
Some people may be hesitant to declare bankruptcy because they fear that it will jeopardize their chances of qualifying for a loan in the future. Yet, Chapter 13 does not impact your credit score the same way that other bankruptcy types would. This is because it remains on your credit report for less time. Therefore, if you don't default on your negotiated monthly payments, you may qualify for another loan after several years.
You Don't Have to Liquidate Assets
Every bankruptcy type is helpful, but some can make it challenging to regain your financial footing quickly. This is because they require that you liquidate assets to repay creditors. Conversely, Chapter 13 allows debtors to set up a repayment plan instead of selling their possessions to settle debts, which makes it a favorable option. Still, you need to consult your lawyer before filing in order to determine whether it's the right Chapter for your situation.
Contact a bankruptcy lawyer beforehand if you're planning to file Chapter 13. They will advise you on this Chapter's benefits and the intricacies of the application process. Your legal advisor will also help to ascertain whether declaring bankruptcy is right for you before guiding you throughout the process. For more information, contact a Chapter 13 bankruptcy attorney near you.