Why Chapter 13 Bankruptcy is for You

As this recession continues to drag on and our economy stays in a recession more and more people are feeling financial pressures. In what is now being called the Great Recession the number of bankruptcies has increased. This is nothing to be ashamed of, since the whole economy is taking a hit. When you are feeling the financial pressures you may look to bankruptcy to save your remaining assets.

When you find that you can no longer pay your creditors it is usually best to seek legal advice about bankruptcy. Bankruptcy can save you a lot of hassle and trouble from bill collectors constantly calling you. Even though this will hurt your credit history, in the long run you will be better off. But you must know which chapter of bankruptcy to file. There are several to choose from.

When you file bankruptcy you are going before a court and making a statement that you can no longer pay your creditors. This stops the creditors, by law, to stop calling and sending letters and also to stop all legal actions against you. By doing this you will be taking a large burden off of your shoulders. It may seem bad now, but in the long run you will be better off. Millions of people have filed bankruptcy including Donald Trump, so you're in good company.

Filing bankruptcy is a legal transaction that is recorded in a court and all future creditors will know about. There are five common bankruptcies that individuals usually use. They are chapter 7, 9, 11, 12 and 13. Each bankruptcy is a little different but let's focus on chapter 13.

Chapter 13 bankruptcy is sometimes called the most honorable. The reason for this is, you are given up to five years to clear your debts. It is called honorable because in the long run you try to repay all your creditors back. Its official title is "Adjustment of Debts of an Individual with Regular Annual Income". When you file a Chapter 13 bankruptcy you will have to show how you plan to repay these debts over the five years. A trustee will decide if your plan is feasible.

The beauty of Chapter 13 bankruptcy is your assets are not liquidated and you get to keep everything. It is almost like you're given five years to fix your own credit. All you have to do is prove that you have a plan and that is possible to complete it.