Do you have many debts that are causing you financial hardship? If so, you may be looking into bankruptcy as a way to take care of them all. The Chapter 13 method allows you to create a repayment plan to consolidate your debt and lets you pay it back on a different schedule. Here are some reasons that you should use Chapter 13 for your financial woes.
Lower The Payment
A typical reason that people fall behind on their bills is because the monthly requirements for all of them is too much to pay. Chapter 13 allows debts to be consolidated so that you are essentially writing one check each month that has a lower monthly payment. It allows you to pay off these debts over a longer period of time, which makes them more manageable.
Reduce The Impact On Your Credit Report
Of all the different bankruptcy methods, Chapter 13 will have a limited impact on your personal credit score. There is a short term impact where you will have trouble getting a loan for a home or car, or opening a new line of credit, but it will eventually go away after several years. Chapter 7 completely discharges debt, and since you end up not having to pay for the debts off, it has an impact on your credit report that lasts for quite some time.
Include Legal Fees In Repayment Plan
One thing that you can include in your repayment plan under Chapter 13 bankruptcy are any legal fees associated with the bankruptcy filing. This will help reduce any associated costs from being paid off immediately and can be lumped into the monthly payment that you owe.
Receive An Automatic Stay
An automatic stay is offered as part of Chapter 13 bankruptcies, and it prevents all creditors from calling you or sending mail about the money that they are owed. If you owe money on property that you are paying off through the repayment plan, it also prevents the property from being seized so that you can hold onto it.
Prevent Home Foreclosure
A major reason why people select Chapter 13 bankruptcy is because they want to keep their home. The payments that were missed on their mortgage can be included under the repayment plan, though you must also stay up to date on future mortgage payments as part of your original mortgage. If the payments are too high, you may need to refinance to extend the length of the loan and lower the monthly payment that you owe on the mortgage.
For more information, contact local professionals or visit sites like http://www.haven-law.com/.
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