Deciding whether you should declare bankruptcy is always very difficult. In addition to deciding whether or not you should file, you’ll also need to consider which type of bankruptcy is appropriate. This is typically either Chapter 7, Chapter 11, or Chapter 13 bankruptcy. Here are some of the top advantages and disadvantages to consider as you decide if a Chapter 13 bankruptcy and a Chapter 13 attorney in West Palm Beach, FL is best for you.
Disadvantages of Chapter 13
There are a number of disadvantages to filing for Chapter 13 bankruptcy. In general, here are the top ones to keep in mind:
Time – It can take up to five years for you to repay your debts under a Chapter 13 plan.
Living Lean – Debts need to come out of “disposable” income, which is what’s left over after the bare necessities are paid. Therefore, all extra earnings are used up for the whole repayment plan.
No Credit Cards – A Chapter 13 attorney will tell you that you’ll lose all your credit cards.
A Long Road – A Chapter 13 bankruptcy can remain on your credit report for up to 10 years.
Student Loans Don’t Count – Bankruptcy won’t address your student loan debt.
Advantages of Chapter 13
Flexibility – Chapter 13 trustees, can be flexible on the terms of your payments. You may be able to stretch out your debt payments, reduce the amounts, or give up an item you are making payments on.
Keep Your Things – A Chapter 13 attorney will also tell you that while you’re making payments under a Chapter 13 plan, you get to keep the property on which you’re making payments.
Done Means Done – Once you fully complete a bankruptcy repayment plan under Chapter 13, individual creditors cannot obligate you to pay them in full.
Bankruptcy can negatively affect your future credit, your reputation, and your self-image. However, it is true that it can also considerably improve your life’s short-term quality if you find yourself financially in over your head.