The decision to file for bankruptcy can overwhelm anyone. Not only are you dealing with aggressive creditors and possible legal action, but you’re also trying to make the right financial decisions for you and your family’s future. In the thick of things, bankruptcy can feel like yet another impossible mountain to climb. However, Chapter 13 bankruptcy can actually help relieve your financial stress and reduce your anxiety.
Halt the Collection Process
The biggest benefit of filing for bankruptcy is that your creditors are legally prohibited from pursuing you once you file, provided that you comply with the court’s requirements. This means that your creditors have to stop calling you and it puts any pending legal action (primarily lawsuits or garnishments) on hold.
Repay What You Owe
Contrary to popular belief, most people who file for bankruptcy actually want to pay their debts. The problem is that they can’t, especially once the interest, late fees, and other penalties start to accrue. By filing for bankruptcy, you can stop those debts from growing, and work out a plan to repay your debts. Chapter 13 bankruptcy provides a viable, realistic plan for repaying your debts. Once they complete the payment plan, many people feel a deep sense of satisfaction, knowing that they have honored their obligations.
Reduce Your Payments
When you file for Chapter 13 bankruptcy, the court will want you to disclose all the debts you have, your monthly income, and any other financial obligations. Working with your attorney and the bankruptcy trustee, you will then propose a payment plan. Part of this process may include reducing your creditors’ claims against you. The ultimate objective of the plan is to repay your debts on terms that you can afford. You can take as long as five years to make payment in full. As a result, you will have much lower monthly payments than you have now.
Reduce the Number of People You Have to Pay
The Chapter 13 payment plan does not require you to negotiate with and then pay each of your creditors individually. Once the court approves the payment plan, you will then make your payments to the court. The court will then disburse payments to those creditors according to your payment plan. In the end, you wind up writing far fewer checks and don’t have to stay on top of multiple payment plans, so long as you stay current on your payments into the court.
Keep Your Property
Another benefit of Chapter 13 bankruptcy is that you may keep your property, such as your house and your car. You will need to keep up with your payments and comply with the court’s requirements, but if you do, you won’t lose these assets to repossession or foreclosure.
In addition to the Chapter 13 payment plan, the other objective of filing for bankruptcy is to obtain a discharge of your debts. If your creditors were properly notified of your bankruptcy, you are no longer personally liable for the debts that arose before you filed for bankruptcy.
Contact a St. Petersburg Bankruptcy Attorney to Discuss Your Options
If you are facing multiple collection actions and considering filing for bankruptcy, an experienced bankruptcy attorney can help you understand your options. To schedule a free consultation with one of the lawyers at Berkowitz & Myer, call us at (727) 344-0123 or send us an email through our online contact form.