The pandemic has been harsh to everyone. If you have accumulated debts that you cannot repay and are thinking of filing for bankruptcy, you are not alone. Bankruptcy could, in fact, provide much-needed relief. Your creditors won’t chase you anymore, and with Chapter 13 bankruptcy, you can repay your debts over a period of three to five years. Talk to an experienced Hagerstown, MD bankruptcy attorney, to know more, and for your help, we are sharing key details about Chapter 13 bankruptcy.
- You will not lose everything. This is probably the biggest myth about Chapter 13 bankruptcy. Depending on the state laws, you should be able to retain most of your important assets, such as your house, car, retirement account, and personal belongings. Once you file for bankruptcy, there is an Automatic Stay, and therefore, your creditors cannot ask you to liquidate your assets.
- You cannot discharge all of your debts. People often assume that bankruptcy would help them get rid of all their debts, which is not true. You need to understand that bankruptcy is not a magic trick of any kind. Bankruptcy will eliminate most of your debts, including credit card bills, unpaid utility bills, payday loans, medical bills, and personal loans. However, you have to repay student loans, back taxes, and commitments like child support and alimony.
- Bankruptcy is not the end of the world. It is common to think that bankruptcy will ruin your credit and financial situation forever. Chapter 13 bankruptcy will appear on your credit report for up to seven years, but you can rework your finances soon after. Chapter 13 allows you to repay your debt over a period, and this gives you the time to manage your income better. You can also qualify for a mortgage and get new lines of credit in the future.
Get an attorney
Chapter 13 bankruptcy can be hard to understand because it is different from Chapter 7, which allows one to liquidate assets to repay debts. You cannot judge your circumstances based on some facts alone. Let an attorney explain whether you can qualify for Chapter 13 bankruptcy. If you have a decent disposable income that’s above the state median, your attorney can help determine how you can protect your assets. There is nothing to feel ashamed about when a business fails, and the same is true for your personal finances. Don’t let debts ruin your future. Talk to a bankruptcy lawyer now to learn more.
