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Pros & Cons of Chapter 13 Bankruptcy Filings

Heavy debt is not something you should have to live with. Everyone makes mistakes and financial errors, and sometimes it gets out of hand, creating debt. You deserve a way out without destroying your financial future. Chapter 13 bankruptcy might be the answer.

Individuals who use Chapter 13 bankruptcy will find it has its many advantages. Yet, the legal remedy for debt cannot do everything. It might even be disadvantageous for certain people in certain situations. Before you jump to file for Chapter 13, take a closer look at its pros and cons.

Benefits of Chapter 13 bankruptcy include:

  • Shrinks most unsecured debt.
  • Creates a 3-to-5-year debt repayment plan based on your unique financial situation.
  • May discharge debt remaining after plan ends.
  • Often allows you to keep all nonexempt property when you file.
  • Places an automatic stay on your assets, blocking creditors.
  • Buys you more time to repay secured debt that could not be discharged.

Potential disadvantages of a Chapter 13 bankruptcy include:

  • You cannot file as a business or company.
  • You cannot have more than $336,900 in unsecured debt and $1,010,650 in secured debt.
  • You must repay some of your debt as per the agreement of the repayment plan.
  • You may still feel the stress of your remaining debt when your repayment plan ends.
  • You cannot file for Chapter 13 if another bankruptcy petition was dismissed in the last 180 days.

Is Chapter 13 Bankruptcy Going to Work for You?

As it can be seen there are plenty of benefits to Chapter 13 bankruptcy filings, but there are also potential downsides. How can you know what you should be using it for your financial situation and debt relief? The simple answer is letting Schwilm Law Firm, PLLC and our Charlotte bankruptcy attorney help you decide. We have 20+ years of experience with guiding people through bankruptcy, and discussing alternatives when a bankruptcy filing would not be the best choice.

See what we can do for you by calling (704) 750-1324 today. Free consultations are available!