Different types bankruptcy may be appropriate depending on an individual's situation. If you are endlessly stressed about your financial situation and concerned about which debt relief alternative may be the best for you, there are different factors that you should take into consideration before pursuing an option. Chapter 13 bankruptcy, often referred to as the reorganization or wage earners bankruptcy, is when specific assets from an individual are surrendered to pay a debt.
Like any decision, there are pros and cons to Chapter 13. Listed below are the elements you should consider before making a decision one way or the other. Many people find this approach advisable when dealing with debt that has become overwhelming. During this type of bankruptcy, a payment plan will be set up that will allow the regular payment of the debt within a three to five year period.
Pros of Chapter 13 bankruptcy
As soon as you file for Chapter 13 bankruptcy there is an automatic stay ordered, which temporarily stops creditors from collection efforts. One of the distinctive benefits of this type of bankruptcy is that it provides an opportunity to stop foreclosure on your home. It effectively halts the entire foreclosure process and allows the homeowners the option to catch up on past-due mortgage payments. There are stipulations regarding remaining current on payments throughout the repayment period. There is also often the possibility of rescheduling some of your payments over the life of the payment plan which allows more manageable, lower payments overall.
Cons of Chapter 13 bankruptcy
Due to the amount of time that is required for this particular type of bankruptcy, up to 5 years, it will not be over as quickly as other options. Those who do not have a reliable source of income may find that it is not a preferable option because of the need to adhere to a payment plan. There are also stipulations on the amount of debt that can be used for this type of bankruptcy. Remember that not all debt is created equal. There is a difference between mortgage and vehicle loans and credit card or medical bills.
Debt relief options can be complex; it is wise to consult with an attorney for specific inquiries you may prior to filing for bankruptcy. At the Law Office of Robert C. Nisenson, L.L.C., we will discuss the pros and cons of each option based on your specific circumstances. Keep this is mind when talking about your financial future and alleviating some of the stressors caused by your financial hardship. If you are thinking about filing for Chapter 13 bankruptcy, make sure you are fully versed in how it will work. Contact 732-518-8038, we will help guide you through the necessary steps to take control of your financial wellbeing.