The effects of filing for Chapter 13 bankruptcy can be drastic, which is why people think long and hard about it before doing so. Filing for bankruptcy can affect a person’s image, their financial reputation, the future of their credit and much more. Before approaching a Chapter 13 Bankruptcy Lawyer in Jefferson County MO consider some of the pros and cons of this financial move.
Pro: More Time And Flexibility
Chapter 13 bankruptcy is an option for those who have an obscene amount of out-of-control debt but who also earn a large amount of income. Filing for Chapter 13 bankruptcy gives filers more time to restructure and pay off their creditors. In fact, creditors are much more flexible and willing to work with filers who file for Chapter 13 because they want their money.
Con: Maybe Too Much Time
As you just read, those who file for bankruptcy will have more time to pay back their creditors. However, it could take as much as five years for a person to repay their creditors under Chapter 13. When filing for bankruptcy, people want the process to be over with as soon as possible. During this time, a person may have a very difficult time applying for a credit card or getting a loan.
Pro: Bankruptcy Looks Better Than Defaulting
Filing with a Chapter 13 Bankruptcy Lawyer in Jefferson County MO is usually the very last thing a person should think about. However, if you’re missing monthly payments to creditors and defaulting on your loans, it might be time to make the move. Make no mistake; a bankruptcy filing will look bad on your credit report, but it’ll look a lot better than a low credit score and a string of unpaid loans.
Con: Can’t Finance That New Home
Don’t expect to go house shopping anytime soon. Bankruptcy will remain on your credit report for as long as a decade, and your credit will be ruined. With this situation, the majority of mortgage lenders won’t dare offer you a loan for a new home.
Schedule an appointment with a bankruptcy lawyer to learn about the benefits and drawbacks of this option. Again, Chapter 13 bankruptcy can give you more time to pay your bills, but the process could last for years. Filing for bankruptcy at least shows future creditors you tried to solve your problems. However, don’t expect to make any large purchases in the near future.
