Just the thought of filing for bankruptcy itself can be a terrifying thought for many people, so this stops many people who are struggling with debt to even consider this option. Add the complicated guidelines surrounding bankruptcy, and it’s no wonder that most avoid bankruptcy like the plague.
However, for those in certain circumstances, bankruptcy can help you get your finances back on track so you can live the life you deserve.
If you’re one of those people, keep reading. Here are three common myths most people have about filing for Chapter 13 bankruptcy — and the truth behind them.
Myth #1: I have zero control over my bankruptcy repayment plan
While it’s certainly true that the bankruptcy court has the final say over your repayment plan, you’ll actually work with your bankruptcy attorney to devise a plan that works for both you and the court.
Of course, you’ll have to be honest about the income you make as well as your assets and liabilities, but as long as you are, the court shouldn’t have any reason to deny your repayment plan proposal. Chapter 13 bankruptcy is designed to help everyday people get back on their feet, after all, and imposing a harsh repayment plan onto those that can’t afford it does the exact opposite.
Myth #2: I’ll have to repay all of my debt if I file for Chapter 13 bankruptcy
Chapter 13 repayment plans focus on how much disposable income you can dedicate to the plan, instead of the amount of debt you have. Because these plans are short-term ones, you can expect them to last only three to five years at most.
After you’ve successfully completed your repayment plan, the rest of your debt will be discharged, meaning that you likely won’t pay anything close to the total amount of debt you actually have.
Myth #3: My credit score will be ruined once I file for bankruptcy
If you’re seriously considering filing for bankruptcy, chances are your credit score already doesn’t look too good.
While filing for Chapter 13 bankruptcy means that your credit score will certainly drop, it probably won’t hurt you even more than the situation you’re already in. This means that, for many people with a huge amount of debt, the stress of managing your debt on your own outweighs the risks that come with filing for bankruptcy.
Once you’ve completed your repayment plan, however, you can expect to see your credit score steadily improve, as long as you maintain good financial habits.
Book your appointment with James L. Gutting today
When it comes to Chapter 13 bankruptcy — and all things bankruptcy law — there’s no one better to trust than James Gutting. As an experienced and local attorney with a track record of success in this particular area, James is there to make sure that you’re taken care of every step of the way during your case.
Interested in learning more? Schedule an appointment with him today by sending a message through the contact form on our website. If you’d prefer to speak with someone directly, call (989) 743-1188 for our Corunna, MI office and (810) 230-1517 for our Flint, MI office.