Just as with all important decisions in life, it is vital that you weigh the positive and negative aspects of filing Chapter 13 bankruptcy before deciding if it is for you. Filing for Chapter 13 has improved the quality of many lives that were previously buried in debt, but it is imperative to know what you are getting in to ahead of time.
The Pros of Filing for Chapter 13 Bankruptcy:
- The ability to keep all of your property, exempt and non-exempt
- A longer period of time to pay the debt back
- Debts that are not canceled in a Chapter 7 discharge can be reduced in a Chapter 13
- Protection against creditor's collection efforts and wage garnishment
- Co-signers will not be bothered as long as the Chapter 13 plan provides for full payment
- Protection against foreclosure
- Chapter 13 can be filed after Chapter 7 to pay off any remaining liens
- Creditors can be separated by class. Different classes of creditors will get different percentages of payment. This enables you to treat debts where there is a co-debtor involved on a different basis than debts incurred on your own.
- Chapter 13 can be filed repeatedly
- Chapter 13 bankruptcy can stay on your credit report for up to ten years
- Your payment plan can extend over the course of five years
- You will not have any "extra" money during the time that you are paying off your debt. Once your basic necessities like food and shelter are accounted for, any additional money you have will go toward paying off the debt.
- Chapter 13 does not relieve you of paying off certain debts like child support or student loans.
The Cons of Filing for Chapter 13 Bankruptcy:
When you're having serious financial issues, despite any "cons," filing for Chapter 13 may be your best option overall.
If you are considering filing or if you have any questions, contact experienced Houston bankruptcy attorney J. Thomas Black at 888-707-1233. With over 30 years of practice in bankruptcy law, Mr. Black will be able to honestly evaluate your situation and answer any questions you may have.