Many people facing financial difficulties set their sights on Chapter 7 bankruptcy. They understand that this allows them to discharge some or all of their debt, thus giving them a fresh start in the immediate future.
If you find that you don’t qualify for Chapter 7 bankruptcy, you shouldn’t turn away just yet. Instead, it makes sense to learn more about Chapter 13 bankruptcy.
Chapter 13 bankruptcy may not be your first choice, but here are three reasons why it’s a good decision:
- Save your home from foreclosure: With Chapter 13 bankruptcy, you can stop foreclosure proceedings, clear up past due payments and remain in your home.
- Less impact on your credit report: A Chapter 13 bankruptcy filing remains on your credit report for seven years. Although this is a long time, it’s three years less than a Chapter 7 filing.
- Rescheduled secured debts: You may find that you have several types of secured debts, such as your home and motor vehicles. Chapter 13 bankruptcy allows you to reschedule these debts by extending them over the life of your repayment plan. Not only does this allow you to keep the property, but it can also result in a lower payment.
It’s not always easy to get on board with Chapter 13 bankruptcy after you’ve had your sights set on Chapter 7. However, if you truly want to improve your financial situation, it’s a good idea to at least compare the pros and cons.
If you come to find that filing for Chapter 13 bankruptcy is the answer to your problems, collect the necessary information, learn more about the process and take the first step in getting started.