Many people that have lost their jobs during the pandemic are getting to the point where their finances are now out of control. Through no fault of their own, their situation has gotten so dire they’ve looked to bankruptcy as an option. If you’re considering bankruptcy, Chapter 7 is the most common, but Chapter 13 has many unique benefits of its own.
You Pay Back Debt
Chapter 13 bankruptcy differs from Chapter 7 in that it’s not a complete discharge of debt. The court sets up an affordable payback plan and many debts are reduced. This is a good solution for those that would like to pay back the money they owe. Plus, you’ll have only one convenient payment instead of many.
It’s Less Expensive to File
Chapter 7 bankruptcy can be expensive to file especially when you’re strapped for cash to begin with. Chapter 13 costs less money upfront and your bankruptcy attorney Howard County MD can show you the best way to file without sacrificing money you need to live on.
You Can Halt a Foreclosure
Many people fear the loss of their home when filing for bankruptcy, but this usually won’t happen even in Chapter 7 if your payments are current, or you have little equity. However, in Chapter 13, you can keep your home even if your payments are late, or a foreclosure is starting.
You Can Improve Your Credit Score
Another reason Chapter 13 bankruptcy works to your advantage is that it improves your credit score. A common fear is that your credit will take a hit, but lenders see Chapter 13 as you making an effort to pay back your debts, so you’ll see your credit rating rise.
You’ll Resolve Debt
Any type of bankruptcy can be a difficult decision to make. Weigh your choices carefully, as Chapter 13 has definite advantages. Then, seek the assistance of a qualified bankruptcy attorney to begin resolving your debt.