Many in dire financial straits fear bankruptcy. Facing a possible bankruptcy can be stressful but there is no need to be afraid of the process. Unexpected medical bills and loss of income are two common causes of bankruptcy. These reasons are often out of one’s control, and the wise financial move could be filing bankruptcy.
Those concerned about losing their home should consider filing for Chapter 13 bankruptcy because it ceases foreclosure proceedings if mortgage payments are on time. While Chapter 7 bankruptcy allows the filer to protect certain property, the potential to lose it in the proceedings is greater.
The law forbids other creditors from directly contacting you in this time. That means an end to aggressive phone calls and letters.
Is it right for you?
Those with regular income may be strong candidates for Chapter 13 bankruptcy. One big advantage of Chapter 13 bankruptcy is that it allows the debtor to repay their creditors over a three-to-five-year period. Candidates whose income is more than the state median would qualify for the five-year repayment plan, but law forbids payment plans beyond five years.
Chapter 13 acts like a debt consolidation company where the trustee is paid, and they distribute the payment among creditors.
Pursuing a Chapter 13 bankruptcy may protect liable third parties like cosigners in the process. If you had a friend or family member help secure an approval for a loan or credit card, this type of bankruptcy may protect them.
Nothing to be ashamed of
Anyone can hit hard times, and there is no shame in considering filing bankruptcy. Bankruptcy doesn’t mean avoiding your obligations; rather it’s a step towards reclaiming your financial well-being. Those with a regular income may want to consider the many benefits