Bankruptcy Basics

Weighing the Pros and Cons of Chapter 13

Posted by Craig Black | May 29, 2024 | 0 Comments

Chapter 13 bankruptcy can be a lifeline and a fresh start for many people, but is it right for you? Let's break down the pros and cons to help you decide.

The Benefits of a Chapter 13 Repayment Plan

  • Save Your Home and Car: Facing foreclosure or repossession? Chapter 13 can halt foreclosure proceedings and allow you to catch up on missed mortgage and car payments while you repay your debts.

  • Restructure Debt: Not all debt is created equal. Chapter 13 lets you prioritize your debts and potentially reduce the amount you owe on unsecured debts like credit cards.

  • Stop Creditor Harassment: Once you file, your creditors will have to work through the court to collect, and that means they'll stop calling you.

  • Rebuild Credit: Completing a Chapter 13 plan shows creditors you're committed to repayment, which can help rebuild your credit score in the long run.

  • Protects Co-signors: You don't want the family members or friends who consigned on a loan for you to get stuck with your debt. Chapter 13 can keep them out of it.

The Challenges of Chapter 13

  • Long-Term Commitment: Chapter 13 is a marathon, not a sprint. The repayment plan typically lasts three to five years, requiring strict budgeting and on-time payments.

  • Credit Impact: Filing for bankruptcy will stay on your credit report for seven years. This can make it harder to qualify for loans or credit cards with favorable terms.

  • Court Costs and Attorney Fees: There are associated costs with filing Chapter 13. Consulting with a bankruptcy attorney can help you navigate the process and maximize your chances of success.

  • Not All Debts are Discharged: Certain debts like child support, alimony, student loans, and most tax debts cannot be eliminated through Chapter 13.

  • Disposable Income is Necessary: You will need enough income to meet the obligations in your repayment plan.

Call Us for a Free Consultation

Bankruptcy is a complex legal process, and the decision to file shouldn't be taken lightly. Schedule a free consultation with The Craig Black Law Firm today to discuss your specific situation and explore all your options. We can help you determine if Chapter 13 is the right path for you and guide you through the filing process.

Remember, there's no shame in needing help. Bankruptcy exists to give you a fresh start and a chance to move forward on solid financial ground.

About the Author

Craig Black

I had never thought much about bankruptcy law, but after graduating from law school, I moved to Chicago. My first job as an attorney was with a law firm that specialized in bankruptcy. Within a few years, I went from being the youngest attorney in the firm to a managing attorney. During my time t...


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