If you're feeling overwhelmed by debt, you might be considering filing for bankruptcy. One option is Chapter 13 bankruptcy, which can offer several benefits for the average consumer. Here are the top five benefits of Chapter 13 bankruptcy:
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Protection from Foreclosure: If you're facing a mortgage foreclosure, Chapter 13 bankruptcy can help you catch up on your payments and keep your home. The bankruptcy court will establish a payment plan for you to pay back the missed payments over a three to five-year period.
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Stopping Creditor Harassment: Once you file for Chapter 13 bankruptcy, an automatic stay goes into effect. This means that creditors must stop all collection efforts, including harassing phone calls and wage garnishments. You'll have some peace of mind knowing that creditors can no longer bother you.
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Paying Off Debt: Chapter 13 bankruptcy allows you to repay your debt over a three to five-year period. During this time, you'll make one payment to the bankruptcy trustee, who will then distribute the funds to your creditors. This can be a more manageable way to pay off your debt than trying to make separate payments to each creditor.
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Keeping Your Property: In Chapter 13 bankruptcy, you can keep your property, including your home, car, and personal belongings. You'll make payments towards your debt, but you won't have to give up any of your assets.
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Improving Your Credit Score: While filing for Chapter 13 bankruptcy will have a negative impact on your credit score, it can also be an opportunity to start fresh and rebuild your credit. Once you complete your payment plan, you'll have paid off your debt and can start working on improving your credit score.
In conclusion, Chapter 13 bankruptcy can offer several benefits for the average consumer struggling with debt. It can provide protection from foreclosure, stop creditor harassment, allow for debt repayment, protect your property, and even improve your credit score in the long run. If you're considering bankruptcy, it's important to talk to a knowledgeable bankruptcy attorney to determine if Chapter 13 is the right option for you.
