Chapter 13 bankruptcy is often misunderstood, and many myths surround this type of bankruptcy. These myths can prevent people from considering Chapter 13 bankruptcy as a viable option for their financial situation. In this blog, we will debunk some of the most common myths about Chapter 13 bankruptcy.
Myth #1: Chapter 13 Bankruptcy Ruins Your Credit Score Forever
Fact: While it is true that filing for bankruptcy can negatively impact your credit score, the impact is not permanent. Yet in reality, many people who file for Chapter 13 bankruptcy see their credit score start to improve soon after they complete their repayment plan. It is important to work with an experienced bankruptcy attorney who can help you rebuild your credit after bankruptcy.
Myth #2: You Will Lose All Your Property If You File for Chapter 13 Bankruptcy
Fact: Chapter 13 bankruptcy is a reorganization bankruptcy, which means that you can keep your property while you repay your debts over a three to five year period. The court will create a repayment plan that takes into account your income and expenses, and you will make monthly payments to a trustee who will distribute the funds to your creditors.
Myth #3: Only People with High Incomes Can File for Chapter 13 Bankruptcy
Fact: Chapter 13 bankruptcy is available to people with all income levels. However, there are limits on how much debt you can have to file for Chapter 13 bankruptcy. As of April 2021, the limit for secured debt is $1,257,850, and the limit for unsecured debt is $419,275.
Myth #4: Chapter 13 Bankruptcy Takes Too Long to Complete
Fact: While Chapter 13 bankruptcy does take longer to complete than Chapter 7 bankruptcy, it usually only takes three to five years. The length of your repayment plan will depend on your income and expenses, as well as the amount of debt you have.
Myth #5: Chapter 13 Bankruptcy Is Too Complicated to Navigate on Your Own
Fact: While it is always recommended to work with an experienced bankruptcy attorney, it is possible to file for Chapter 13 bankruptcy on your own. However, it can be complicated and time-consuming, and there are many rules and regulations that must be followed. Working with an attorney can help ensure that your bankruptcy is successful and that you are able to keep your property.
Know the Facts, Trust Weintraub Zolkin Talerico & Selth
In conclusion, Chapter 13 bankruptcy is a viable option for many people struggling with debt. It is important to separate fact from fiction when considering bankruptcy and to work with an experienced bankruptcy attorney who can guide you through the process. If you are considering Chapter 13 bankruptcy, contact Weintraub Zolkin Talerico & Selth today for a consultation. Our experienced bankruptcy attorneys proudly offer Chapter 13 assistance to help you get back on your feet and get on with your life.
Weintraub Zolkin Talerico & Selth is available by phone at (310) 220-4147.