When is filing for Chapter 13 bankruptcy a good idea?
If you earn a decent, steady paycheck but you’re still struggling to pay your debts on time, it may be worth considering filing for bankruptcy. While your income level may render you ineligible to apply for Chapter 7 bankruptcy relief, it is likely that as a steady wage earner, you can have a debt reorganization plan approved under Chapter 13 of the U.S. Bankruptcy Code.
This opportunity will allow you to benefit from the protections of the automatic stay and the issuance of a discharge at the end of the bankruptcy process. It could even help you to save a home that is at risk of foreclosure.
Certainly, filing for bankruptcy isn’t the best debt management or debt solution for all consumers. If you are simply struggling to pay your mortgage but are not yet behind on your payment schedule by much, negotiating a loan modification may be a better option. However, if you’re struggling with multiple debts, Chapter 13 bankruptcy could be a great opportunity.
After you file, most collections actions will be halted, and you’ll be given the opportunity to put a manageable repayment plan into place. You’ll also be able to start working toward a brighter financial future.
Weighing your options when the debt becomes overwhelming
By carefully considering whether Chapter 13 bankruptcy may be a good solution to your current financial challenges, you may be able to save your home from foreclosure, render your debt repayment situation far more manageable and secure a discharge for a significant fraction of your unsecured debt obligations.
Speaking with an experienced legal professional can help to ensure that you’re able to make informed choices about this and other debt-relief options as you move forward.