Encountering serious financial challenges in life is not uncommon. In fact, some Louisiana residents are currently facing foreclosures on their homes or businesses. Chapter 13 bankruptcy is often a means for improving one’s financial circumstances in the short term and also for laying the groundwork for a stronger financial future.
One of the benefits of this debt relief option is that it essentially buys time, meaning the petitioner is allowed to extend the time that he or she has to pay off a debt. The petitioner proposes a repayment plan over a three to five-year period, which must be approved by the court before it becomes effective. Perhaps one of the greatest advantages of Chapter 13 as opposed to other types of bankruptcy is that the person making payments may retain ownership of his or her assets while doing so.
To quality, one must have reliable, disposable income for it to work. If unemployment is an issue, this is definitely not a viable option. However, a Chapter 7 liquidation proceeding might fit those circumstances.
When considering the pros and cons of a Chapter 13 bankruptcy, some Louisiana readers might worry that filing for bankruptcy will destroy their credit ratings. While it is true that bankruptcy will show on a credit report for some time, it is not permanent and a positive credit rating can be restored in time. An experienced debt relief attorney can explain eligibility requirements and help determine whether a court-approved payment plan may be the best course of action to overcome a current financial crisis.