If you and your family have a home, assets, or otherwise an earning capacity that is above the average family income in Rockland County, but are struggling to keep up with your bills, then you may be considering Chapter 13 bankruptcy. But before you decide to file, you must weigh its advantages and disadvantages. Follow along to find out if there are downsides to filing for Chapter 13 bankruptcy and how a proficient Rockland County Chapter 13 bankruptcy attorney at The Law Offices of Allen A. Kolber, Esq. can help you make this determination.
What are the advantages of filing for Chapter 13 bankruptcy?
One of the biggest advantages of filing for Chapter 13 bankruptcy is that your assets will be under the protection of the bankruptcy court. In the meantime, you will be able to build and submit a repayment plan that will state how you intend to pay off your debts within the next three to five years.
With this technique, you will be able to catch up on your mortgage payments and other bills in a timeframe that works better for your current financial situation. All the while, you will be relieved of any stress that creditors pursuing collection activities. And once you complete your Chapter 13 plan, all your remaining dischargeable debts will be eliminated.
What are the downsides to filing for Chapter 13 bankruptcy?
While there are great advantages, there are also some downsides to filing for Chapter 13 bankruptcy that you must keep in mind. One example is that, with your Chapter 13 repayment plan, you will have to pay off your debts with all of your disposable income. So with repayment plans sometimes lasting as long as five years, you may have your disposable income tied up for quite some time. Examples of other potential downsides are as follows:
- A bankruptcy filing will remain on your credit report for up to 10 years.
- A bankruptcy filing will cause you to lose all your credit cards.
- A bankruptcy filing will make it difficult to obtain a mortgage if you do not already have one.
- A bankruptcy filing will not relieve you of your alimony obligations.
- A bankruptcy filing will not relieve you of your child support obligations.
- A bankruptcy filing will not relieve you of your personal debts.
Another important note is that, once you file for Chapter 13 bankruptcy, you will not be able to help your financial situation once more via a Chapter 7 bankruptcy filing for the six years following your proceedings. Nonetheless, if you are having trouble determining whether a bankruptcy filing is best for your financial situation, then you must not hesitate in consulting with a talented Rockland County, New York bankruptcy attorney. We look forward to working with you.