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Understand the biggest benefits of Chapter 13 bankruptcy

Before you decide in favor of Chapter 13 bankruptcy, it would be in your best interest to learn more about the benefits. Also, this is not something to take lightly. Since bankruptcy will impact your life in many ways, you don't want to file until you are 100 percent sure that it's the best decision for you and your finances.

There are many benefits of Chapter 13 bankruptcy, with these among the most discussed:

-- The ability to avoid foreclosure. This is a big deal for many people. Upon filing for Chapter 13 bankruptcy, an automatic stay will go into place. This means that your lender is not permitted to move forward with the foreclosure just yet. You can then get your ducks in a row, eventually catching up on back payments via your repayment plan.

-- Less impact on your credit report. A Chapter 13 bankruptcy will remain on your credit report for seven years. While this doesn't appear to be a benefit, it's much better than the 10 years for a Chapter 7 filing.

-- Reschedule secured debt. For example, you may be able to reschedule a car loan, thus lowering your monthly payment to make it more affordable.

If you are considering Chapter 13 bankruptcy in New Jersey, get started by learning as much as you can about the process. This means comparing the pros and cons with the idea that you'll eventually come to a final decision.

If the time comes to move forward, don't hesitate to consult an attorney who can help with the filing and all the follow up work.

Source: FindLaw, "Benefits of Chapter 13," accessed Aug. 30, 2016

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