Whether you have struggled with your finances for years or recently experienced a sudden event, such as a medical emergency or job loss that led to financial difficulties, you know that these issues can affect most areas of your life. You may find yourself unable to pay for necessities or other items without the nagging feeling that you owe a considerable amount of money to creditors. Often, the stress that comes along with substantial debt can leave you feeling overwhelmed.
If you feel that the time has come to fully address your debt issues, you may consider bankruptcy. Though many people speak of this option in hushed tones as if it is a negative last resort, bankruptcy can actually offer many benefits to individuals needing financial relief. For some individuals like you, Chapter 13 bankruptcy may be worth a closer look.
Differences in bankruptcy types
The two most common forms of personal bankruptcy are Chapter 7 and Chapter 13. With Chapter 7, individuals liquidate their assets in order to repay creditors. Typically, individuals must fall under a certain income level in order for this option to act as the best avenue.
However, if you still generate an income over a certain amount and can work to repay your debts over time, Chapter 13 may better suit your circumstances. This type of bankruptcy will allow you to restructure your payments in order to pay them back over the course of three to five years.
Paying back debts
Once you begin the bankruptcy process, you will need to create a repayment plan. In order to do so effectively, you will need to understand which debts fall into the priority category and need repaying first and what other debts will need regular payments. Of course, if you do not have a firm grasp of your financial situation or know where to start when creating a repayment plan, you may feel overwhelmed. Luckily you can seek help and reliable information.
Effectively utilizing Chapter 13
As mentioned, Chapter 13 bankruptcy could offer you many financial benefits when it comes to seeking debt relief. However, you will need to properly follow the process, understand how to make it work for you and learn how to gain court approval. Because bankruptcy can have its complications, you may benefit from enlisting the help of an attorney.