Though rumors perpetuated for years paint bankruptcy in a negative light, it serves as a useful tool for anyone finding themselves in debt.
Each type of bankruptcy has its own benefits and parties that it primarily serves. Chapter 13 is one of the most common types, and it has its own benefits to offer.
Time allowance in Chapter 13 bankruptcy
The United States Courts discusses benefits and downsides of filing Chapter 13 bankruptcy. Chapter 13 essentially allows people in debt to restructure what they owe and create a new payment plan. It requires sticking to that plan, but if a debtor can do this, they will find numerous benefits to be had.
For example, while it takes longer to pay off your debts this way, you can take more time and enjoy a more flexible payment plan. You can even reduce your debt amounts, stretch your payments or give up property you still make payments on. Better yet, successful completion of a Chapter 13 repayment plan means that debt collectors can no longer pursue you for the full amount.
Keeping your property and record
You can keep all property you make payments on, too. This is a big benefit to many people who fear they will lose everything when filing for bankruptcy.
It is true that Chapter 13 bankruptcy will remain on your record for years to come. However, it is not more hurtful than defaults, repossessions, lawsuits, and missed debt payments. Having to explain those may serve as an even bigger detriment.
So, filing for Chapter 3 bankruptcy can protect your finances and allow you a path back to financial health, all without putting you at risk.