If you are earning a wage, you may decide that it is a good idea to file for chapter 13 bankruptcy in order to get out from under debt. However, depending on how your earning situation has changed, you may feel that it is more effective to simply pay down your debt without the assistance of a bankruptcy attorney. There are several pros and cons of filing for chapter 13 bankruptcy.
No More Phone Calls From Creditors
Your creditors may be causing your phone to ring off the hook. If you agree to a chapter 13 bankruptcy plan, your creditors will no longer be allowed to engage in harassing phone calls. However, if you contact your creditors and enter an agreement, your creditors will likely stop calling.
You Can Renegotiate Your Debt Under Chapter 13
It can take a very long time to pay off your debt under chapter 13. However, if you may be able to renegotiate how much you owe and after you have paid in full, your creditors will no longer need to insist that you pay any further.
Your Secured Debt Might Be Too High
You may not be able to file for chapter 13 bankruptcy if your secured debts are too high. There is a maximum amount of secured debts that you are allowed to hold. If you have taken out a mortgage for a very expensive house, it is possible that you will not be allowed to file for chapter 13 bankruptcy.
Chapter 13 Is Easier To Explain
When you file for chapter 13 bankruptcy, it is your responsibility to make the plan succeed. You will need to make sure that you have a secure source of income to ensure that you will be able to make timely payments. You will also need the self-control that is necessary to ensure that you have the disposable income needed to pay off your debts. One way to make this easier is through payroll deductions.
Chapter 13 bankruptcy is much easier to explain to a creditor than repossessions, defaults and other derogatory marks. The chapter 13 bankruptcy does stay on your credit score for a number of years, but it also shows that you will pay back the debt that is owed.
If you are struggling to decide whether you should file for chapter 13 bankruptcy, it is recommended that you contact a bankruptcy attorney. An attorney will tell you more about this topic.
Share26 April 2017
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