If you are currently employed, but wish to make some changes to a loan you have, you may want to consider filing for Chapter 13 bankruptcy. This will allow you to restructure the money that you owe your creditor and may be the wisest thing for you to do. Knowing some of the many reasons to file for this type of bankruptcy may encourage you to get started.
Benefit #1: More time to repay the loan
Are you faced with a high car payment that is simply too much for you to pay now? Situations can change, and your income can drastically decrease at any time. Being able to extend the length of the loan may allow you to lower your payments, and this is ideal to help stretch your hard earned money.
It is legal for you to have at least five years to repay a loan that has been restructured with a Chapter 13 bankruptcy.
Benefit #2: Obtain the automatic stay
One of the biggest advantages of filing for a Chapter 13 bankruptcy is that creditors will be unable to contact you. Are you behind on payments and simply don't have money to get caught up on these? If so, the automatic stay can protect you from being continuously harassed by your creditors regarding the unpaid debt that is hanging over your head.
Benefit #3: Protect your co-signers
Did another person help you get the loan and signed for you to do so? Well, if you are unable to repay the loan back, it is typically on the co-signer to do so or face negative consequences to the credit score.
However, when you file for this type of bankruptcy, there is such a thing as co-signer stay when doing so and this means the person who signed for you won't be affected if the loan is not repaid.
Benefit #4: Stopping a foreclosure
Is your home at risk for being foreclosed on currently? This can be a devastating thing to face and may cause you a great deal of stress. By qualifying for this type of bankruptcy, you can ward off the possibility of your home being taken away from you.
Finally, the key to getting your financial life back on track may rest in filing for Chapter 13 bankruptcy. Be sure to work closely with a bankruptcy attorney (such as one from FactorLaw) who can tell you what to do for potential success.
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