All of your extra cash is thus tied up during the entire repayment plan. You may be able to stretch out your debt payments, reduce the amounts of your payments, or give up an item of your property that you're making payments on.Īlso, once you successfully complete a repayment plan under Chapter 13, individual creditors can't obligate you to pay them in full.ĭebts must be paid out of your "disposable" income, which is whatever income you have left over after necessities (such as food, shelter, medical care) are paid. While it generally takes longer for you to pay off your debts, you'll have more time to make your payments, and Chapter 13 trustees may be flexible on the terms of your payments. It can take up to five years for you to repay your debts under a Chapter 13 plan The following list of Chapter 13 bankruptcy advantages and disadvantages will help you decide the best option for your needs. Pros and Cons of Chapter 13 Bankruptcy Protection: Overview Here is a list of advantages and disadvantages to consider as you decide whether Chapter 13 bankruptcy is the best option. In addition to deciding whether to file, you'll also want to consider which type of bankruptcy is right for you (typically either Chapter 7, Chapter 11, or Chapter 13). But it can also improve your short-term quality of life considerably, as the calls and letters stop. It affects your future credit, your reputation, and your self-image. Deciding whether to declare bankruptcy is very difficult and should never be taken lightly.
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