Bankruptcy is intimidating both by its nature and how society has framed it. Most people assume it means destroying your credit score and forfeiting your prized assets, like your car and house, in exchange for debt elimination. While this is true in some cases, it is not the norm, especially if you use Chapter 13 bankruptcy with the assistance of a bankruptcy lawyer.
Indeed, a Chapter 13 bankruptcy can bring significant benefits the risk of losing any of your own assets. This is due to the fact that Chapter 13 reorganizes your debt and forces your creditors to accept a payment you can afford through adjustment. It is not a total debt purge like Chapter 7 attempts.
How Chapter 13 Bankruptcy Works
You should consider Chapter 13 bankruptcy if you have significant debt. When your filing is approved, the unsecured debts you owe will be reduced, many times by a large percentage. What is left after the reduction is rearranged into a new repayment schedule tailored to your finances, income, and needs to help increase the chances you can pay it off completely. The repayment plan will last three-to-five years, and anything unpaid at the end is discharged, as long as you have completed the payment plan.
Chapter 13 bankruptcy does not try to remove all of your debt and requires you to repay some of it, which can feel like a negative. However, this tradeoff is matched with more advantages to you than Chapter 7 bankruptcy affords. For examples, you are do not lose assets, you can stop foreclosure actions on your home in some cases, it can remove HOA liens and second mortgages on your home, and it generally impacts your credit score less than Chapter 7.
Would you like to know more about Chapter 13 bankruptcy? Our Boca Raton bankruptcy attorneys of Klein Law Group would be happy to sit down with you and help you decide what type of bankruptcy filing, if any at all, is right for your unique situation. Contact us today by calling 561-220-6659 and scheduling a free consultation.