If you find yourself in a difficult financial position, there may come a time when you look into Chapter 13 bankruptcy. This is not something you have to rely on, but it's good to learn more about the process and what it can do for you.
There are many benefits of Chapter 13 bankruptcy, especially when compared to Chapter 7. Keep these things in mind:
-- Used to avoid foreclosure. One of the top benefits of Chapter 13 bankruptcy is the way that it can be used to prevent foreclosure. With this, you can stop foreclosure proceedings and give yourself enough time to get back on track. You can also use the repayment plan to pay back payments to your lender.
-- Less impact on your credit report. A Chapter 13 bankruptcy will remain on your credit report for seven years. Chapter 7 bankruptcy, on the other hand, will remain for 10 years.
-- The use of a repayment plan. Although you have made financial mistakes in the past, the use of a repayment plan allows you to get back on track. Once complete, you'll have a fresh slate and a better outlook on the future.
Nobody dreams of the day when they can file for Chapter 13 bankruptcy, but this is something that has helped many individuals rescue their finances from a bad spot.
If you are ready to move forward, learn more about the pros and cons. Only then can you decide what to do next. You may soon realize that Chapter 13 bankruptcy is the best decision you can make.
Source: FindLaw, "Benefits of Chapter 13," accessed Aug. 24, 2016