It is easy to recognize a financial crisis when it hits but not always easy to determine how to resolve one. When a Tennessee resident needs immediate debt relief, there are typically numerous options available, and it can be challenging to figure out which is the best course of action in a particular set of circumstances. There are benefits and potential downsides to Chapter 13 bankruptcy and other debt relief programs.
With a Chapter 13 bankruptcy, it may take longer to pay off a debt. However, that is not always a bad thing. The court allows the filer to restructure his or her payment schedule in order to have more time to satisfy the debt. It is also often possible to reduce the amount of each payment in this type of debt relief program.
One of the potentially negative consequences of filing for Chapter 13 bankruptcy as opposed to another type of debt relief is that it usually remains on a credit report for 7 years. A person considering filing for Chapter 13 must weigh the balance between having bankruptcy listed on a credit report and the repercussions of missing mortgage payments or losing a vehicle to repossession, as well as other issues that can arise during serious financial crisis. Many people decide that they would rather apply for bankruptcy and then work to rebuild their credit later than to lose a home in foreclosure or have to liquidate their assets in a Chapter 7 proceeding.
Chapter 13 bankruptcy is only available to people who have a regular and reliable stream of income. The filer’s income level helps to determine the length of the debt reorganization plan. Anyone wishing to know more about this type of debt relief or who needs assistance regarding a legal issue that has arisen in connection with financial crisis may request a meeting with an experienced bankruptcy law attorney for support.