Do you have a lot more debt than you can manage? Have you fallen behind on your payments to most of your creditors and are now being harassed by many of them at home, on your cell phone, and possibly even while you are at work? If it is all becoming way too much for you to handle, you might want to consider filing for Chapter 13 bankruptcy. Although filing for bankruptcy means having a mark left behind on your credit report for several years, it is an option that could help you save some of your money in the long run while giving you more of a fresh start. If it is currently too hard for you to manage all the different payments that you need to make to the creditors, you should meet with a bankruptcy attorney to go over the chapter 13 filing option and find out if it is right for you.
Start Tackling Your Debt
The primary advantage of filing for Chapter 13 bankruptcy is being able to tackle your debt as soon as possible. There is a possibility that you are currently not paying anything to your creditors because you do not have enough money to pay all of them and you do not know which ones are worth paying anymore because you have already fallen behind. However, the idea of continuing to fall behind is something that likely scares you and makes you feel stressed. If you do want to start tackling your debt, filing for Chapter 13 bankruptcy is the way to do it. You will still pay off your debt to the creditors who have allowed you to borrow from them, but it will be much easier for you to do so when your creditors stop charging interest and agree to accept less than what you originally owed them. If you would love to start the process of tackling your debt and paying things off little by little, now is the time to get the bankruptcy process started.
Pay Less Money Back to Creditors
If you are filing a Chapter 13 bankruptcy, it may be possible for you to pay less money back to the creditors over time. Before agreeing to a payment arrangement in which you will pay out a specified amount to your creditors based on what you owe and what you can afford, your attorney will work on negotiating with the creditors to get some of your debt reduced. For example, if you owe $5,000 to a creditor, the creditor may be willing to accept half of that amount over time if they know that you are now going to make regular payments without falling behind again. Not all creditors are willing to accept only half of what you owe to them, but there is a good chance that your attorney can get your debt significantly lowered for you before you even begin working on paying it all off.
Make One Monthly Payment
Did you fall behind on most or all your payments because it was hard for you to remember when to pay your different creditors? People often become frustrated and overwhelmed when they owe a lot of different amounts of money to different creditors on various days. If you have multiple credit cards and loans, the due dates for the minimum payment on those cards and loans were likely different from one another, causing you a lot of confusion. One of the great things about filing for Chapter 13 bankruptcy is having the ability to make one monthly payment.
Instead of trying to remember to pay specified amounts to different creditors, you can make one monthly payment that is disbursed to each of the creditors that you are paying off. Paying $200 a month on a specific day is much easier to do than paying all kinds of amounts with interest attached on different days of the week. The amount you would need to pay on a monthly basis will vary based on a few different factors, including how much debt you currently owe to the different creditors and how much money you are currently earning on a monthly basis. Some of your living expenses are also considered before a monthly payment total is calculated for you. No matter your situation, the attorney will go above and beyond to make sure the monthly payment you need to make to your creditors is one that you can afford.
Improve Your Credit Score a Bit Faster
Having good credit is important for any adult. If you have bad credit, you will not get approved for a lot of things, including mortgage loans that you might need to have if you want to purchase a home in the future. People with good credit are often charged much less interest than those with bad credit, too. If you do not want to constantly get turned down for things over the next several decades, you need to work on improving your credit score. Despite all the debt you currently have, you still have a chance to get a fresh start and get your credit score to where you want it to be over time.
When you file for other bankruptcy chapters, such as chapter 7, you will have a mark on your credit report that stays there for 10 years. It is something other creditors will see when they are pulling up your credit score details. However, if you decide that you want to go through with filing for Chapter 13 bankruptcy, you can have the mark removed from your credit report in as little as seven years. As a result, you would get to improve your credit score at an even faster pace. Seven years might seem like a long time, but it is far better than waiting 10 years to see your credit score will start to improve.
Avoid Losing Your Home
If you already own a home and have fallen behind on making mortgage payments, filing chapter 13 bankruptcy could help you avoid losing your home. Once you start the filing process, you should begin making monthly payments on your mortgage. However, the amount that is already owed to the mortgage company may be included in the debt that you are resolving by filing for bankruptcy in the first place. The idea of losing the home you love and have invested in over the years is frightening and stressful. If you do not want the foreclosure process to begin, you can work on taking the proper steps to avoid such a bad situation by filing for chapter 13 bankruptcy with an attorney’s assistance.
When you have too much debt, it becomes difficult to keep up with it all. If you have fallen behind over the past several months and owe thousands of dollars to multiple creditors, you should think about filing for Chapter 13 bankruptcy. When you file for bankruptcy, you can start tackling your debt, pay a bit less to the creditors, avoid losing your home, and even improve your low credit score over time. If you know the situation is only going to get worse, now is the time to find a bankruptcy attorney to work with you.
If you have a lot of debt and are looking to find out about different bankruptcy options that could work best for you, contact Bouloukos Oglesby & Mitchell at 205-352-4205. Call the law office to schedule your consultation where you can go over your financial situation and learn more about the process of filing for Chapter 13 bankruptcy.