When you are under the tremendous financial pressure that leads people to file for bankruptcy, often you want the pressure, the stress and the obligation to be gone. This is often the attitude of people who come to a bankruptcy lawyer seeking legal relief of their debt. If this sounds like your situation, you may have considered filing for Chapter 7 over Chapter 13 bankruptcy. However, consider that there may be some advantages for moving forward with a Chapter 13 bankruptcy filing before you sign that legal line!
Chapter 13 bankruptcy and Chapter 7 bankruptcy both affect your credit equally and unfavorably. However, because Chapter 13 bankruptcy filings give you several years to pay off modified debts, you may be looked upon more favorably in the future by the person reviewing your loan application. Showing that you made efforts to pay off creditors means a lot to creditors considering loaning you money.
With Chapter 13 Bankruptcy, an advantage that you can look forward to is that you aren’t forced to liquidate most, if not all of your assets, including your home. Usually people behind on house payments for a significant amount of time are forced into foreclosure, where a bank will demand the entirety of the mortgage upfront. With Chapter 13 bankruptcy, you can prevent this from happening and instead pay back payments in more manageable amounts until you are caught up.
While Chapter 13 bankruptcy is a long-term and rigid process that can take 3-5 years for most people, it is a commitment that you should consider making whenever possible. To learn more about the differences between Chapter 13 advantages and Chapter 7 advantages, contact Groff Law Firm, PLLC.