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The Long-Term Financial Advantages of Chapter 13 Bankruptcy in Raleigh
For some people, filing for bankruptcy is all about eliminating as much debt as possible, all at once. For others, it’s more about buying time. Chapter 13 bankruptcy in Raleigh is designed for such cases.
Instead of wiping out your unsecured debts, this type of bankruptcy allows you to pay them off through a more affordable payment plan. Depending on your situation, it can be the best solution for your long-term financial health.
What’s the difference between Chapter 7 and Chapter 13 Bankruptcy?
A lot of misconceptions surround bankruptcy. It’s often viewed as a last-ditch effort to escape debt, or is cast in light of financial failure.
However, debt is more than just about mismanaging money. There are many reasons why people file for bankruptcy – insurmountable medical bills, credit card debt, job loss, divorce, and more – some of which are beyond one’s control. No matter the reason, however, everyone is entitled to a fresh start.
On that note, Chapter 7 and Chapter 13 bankruptcy are two of the most effective ways to eliminate debt. Below are their basic differences:
- Chapter 7 bankruptcy allows you to discharge unsecured debt. In exchange, your non-exempt assets will be sold to pay off creditors.
- On the other hand, Chapter 13 bankruptcy, aka the wage earner’s plan, enables you to repay part or all of your debt through a 3- to 5-year payment plan. This type of bankruptcy generally allows you to keep your property.
There are very specific qualifications for Chapter 7 and Chapter 13. To qualify for Chapter 7 bankruptcy, for instance, you need to pass the means test. Chapter 13 bankruptcy requires individuals to have a regular income.
Not sure which one is right for you? Weik Law’s bankruptcy lawyer in Raleigh, NC can help you explore your options, so please don’t hesitate to get in touch.
Financial Advantages of Chapter 13 Bankruptcy
If you decide in favor of Chapter 13 bankruptcy, know that it can positively impact your long-term financial health. Some advantages include:
- Only pay what you can afford
Under Chapter 13, your payment plan is determined by your budget, which you put together with the help of your bankruptcy lawyer in Raleigh, NC for approval by the bankruptcy court.
Instead of creditors dictating your monthly payments, you can now pay what you can comfortably afford without sacrificing the rest of your needs.
- Your remaining debts will eventually be discharged
Most people end up paying only a fraction of their total debt under Chapter 13. This is due to only having to pay what you can afford, and the payment plan only lasts from 3 to 5 years. After that, your remaining debts are handled like Chapter 7— all dischargeable debts are wiped out.
- Save your home and other assets
One of the biggest benefits of filing for Chapter 13 bankruptcy in Raleigh is getting to keep your property such as your home. It allows you to catch up on past due payments on your mortgage, as long as you file before the foreclosure sale date and you make the monthly regular payments under your debt reorganization plan.
Get Started on Your Debt-Free Journey
Filing for bankruptcy is never an easy decision to make. Let Weik Law make this an easier process for you. With our experience and expertise, we’ll help you navigate the complexities of bankruptcy with the dignity that you deserve. Call Weik Law Office today at 919-845-7877 for a free consultation, and set up a time to speak with one of our friendly professionals.