Too many people have misconceptions about bankruptcy. They think that a person who files for bankruptcy is irresponsible and just wants a quick and easy way to get out of paying their debts. However, bankruptcy is something that all kinds of adults have to consider thanks in large part to factors like the recent recession, increasing medical expenses and soaring student loans.
Additionally, bankruptcy is not quick or easy. It can be a very complicated process that affects a person's financial standing for years, so it is important not to take the situation and decision to file for bankruptcy lightly. Finally, people who file for bankruptcy aren't just trying to get out of paying debt. In fact, people who file for Chapter 13 bankruptcy want to pay off debt but need help in the form of a repayment plan.
Those who file for Chapter 13 bankruptcy are able to work with a trustee and their creditors to develop a repayment plan that makes it easier to pay down debt. By prioritizing debt based on the type of claim a creditor has allows a person to pay off the most crucial or highest priority first.
Chapter 13 bankruptcy allows a person to take control of their debt, keep their homes and other assets, and put a stop to the calls and collection efforts by creditors. Additionally, while Chapter 13 bankruptcy can affect a person's credit history for the same amount of time as Chapter 7, lenders may look more favorably at people who have repaid debt.
Filing for bankruptcy is an aggressive, but effective, way to deal with debt. Of course, it is not an appropriate solution for every person in every situation, but it is a solution that millions of people pursue. In order to determine if Chapter 13 may be a good choice for you, it can be wise to discuss your financial obligations and options with an attorney.
Source: United States Courts, "Chapter 13 - Bankruptcy Basics," accessed on May 12, 2015