Will Chapter 13 Bankruptcy Ruin Your Life?

Will Chapter 13 Bankruptcy Ruin Your Life?

Understanding Chapter 13 Bankruptcy

Chapter 13 bankruptcy, also known as a wage earner’s plan, enables individuals with regular income to develop a plan to repay all or part of their debts. This plan allows debtors to propose a repayment plan to creditors over three to five years. It’s a legal tool that offers a fresh start, but it does come with consequences.

Common Misconceptions about Chapter 13 Bankruptcy

Many people avoid considering bankruptcy as an option due to the fear that it will “ruin” their life. This fear is often based on misconceptions and misunderstandings. Yes, bankruptcy is a serious decision that should not be taken lightly. However, it does not mean the end of your financial life. Connect with a bankruptcy lawyer to educate yourself about the real implications of debt relief.

Effects of Chapter 13 Bankruptcy

It’s important to understand that Chapter 13 bankruptcy will impact your credit score. However, many people filing for bankruptcy already have low credit scores due to missed payments and high debt levels. While it will stay on your credit report for seven years, the impact lessens over time. In the meantime, you can start rebuilding your credit.

Life After Chapter 13 Bankruptcy

Bankruptcy is not the end, rather it’s a new beginning. Once you have completed your repayment plan, your remaining dischargeable debt will be wiped out. This fresh start gives you the chance to rebuild your financial health. You can start re-establishing credit, saving, investing, and working toward a more secure financial future.

Seek Legal Advice

If you’re considering Chapter 13 bankruptcy, it’s crucial to seek legal advice. At Liviakis Law Firm, we understand that the decision to file for bankruptcy is difficult. Our team can provide you with the information you need to make an informed decision. Call us today at 916 459 2364 for a consultation.