Despite what you might have heard, Chapter 13 bankruptcy is helpful. If you file for Chapter 13 bankruptcy, you can actually improve your life. Of course, bankruptcy affects different people in different ways, but these are five major ways that filing Chapter 13 can help you.
1. Save Your Home
Homeowners who are facing foreclosure are not alone. If you’re behind on your house payments, you might be feeling scared about what is going to happen. In fact, losing your family’s home might be one of your biggest fears.
Of course, there are other ways that you may be able to save your home. Before filing Chapter 13, you may want to explore other options. If these will not work for you, then filing Chapter 13 can help you save your home.
2. Rebuild Your Credit Score
You might already know how much of an impact having a low credit score can have on your life. Right now, you might think that you’re never going to have a decent credit rating. Many people assume that filing Chapter 13 bankruptcy will negatively impact their credit. Those who have good credit can expect their scores to suffer after filing.
For those who have bad credit already, though, Chapter 13 isn’t as harmful. You might even see your score go up a little bit after filing since your debts will be discharged. Please note the bankruptcy will stay on your credit report for seven years. Over time, though, the bankruptcy will not affect your score as much. You can begin rebuilding your score by using credit responsibly after filing.
3. Put a Stop to Collection Calls
Collection calls from your creditors are stressful. Collection calls can also be embarrassing, particularly if you’re getting calls at work or if your creditors are calling the friends and family members that you listed as references when applying for credit.
When you file Chapter 13 bankruptcy, an automatic stay will be put in place. The automatic stay means that your creditors can not come after you in an effort to collect your debts. Once your creditors have been notified of the automatic stay, they should completely stop contacting you. If they don’t, contact your lawyer.
4. Reduce Overall Debt
If you have a lot of debt, you might feel as if you are never going to be able to dig yourself out of the financial hole that you’re in. You probably had every intention of repaying your debts in the beginning, but now, you might need a little help.
With Chapter 13 bankruptcy, you can have many of your debts discharged. When your debts are discharged, you do not have to repay them, as long as you complete your Chapter 13 plan. Because of this, you can greatly reduce how much you have to repay.
5. Pay Less Each Month
Right now, if you’re trying to stay on top of all of your debts, you might have to pay out a lot in monthly payments each month. This might be difficult for you to do while still paying for everything that your family needs.
Even though many people find that finances are tight after they pay their monthly bankruptcy payments, the amount that you have to pay may be less than what you’re paying out to your creditors right now. Because of this, Chapter 13 bankruptcy can help you keep more money in your pocket for covering your family’s needs.
Chapter 13 is not something to take lightly, but it can improve your life. Contact us at Wiesner & Frackowiak, LC, so that we can tell you more about the benefits of filing for Chapter 13 bankruptcy.