You might disregard bankruptcy for what it is — a useful, and sometimes necessary, tool for debt consolidation. Maybe it represents a failure of money management to you. The reality is that life throws everyone curveballs and sometimes bankruptcy is to the tool to get back on your feet.
Each form of bankruptcy has its advantages. According to the United States Courts, they received more than 733,000 bankruptcy petitions. 38 percent of those were Chapter 13 bankruptcies. Does that mean it is an option for you? It depends on your situation.
Many refer to a Chapter 13 bankruptcy as a wage earner’s plan. A debtor proposes the repayment plan and adheres to it over a usual timeline of three to five years. A prime advantage of these plans is that they may save your home from foreclosure while you pay things down.
As an individual, you are eligible for Chapter 13 relief even if you file as a self-employed person or unincorporated business. US law requires you to take an approved credit counseling course before filing, barring emergency circumstances.
Limits on this eligibility include maximum debt ceilings on secured and unsecured debt, but unless your total debt is in the hundreds of thousands that may not affect you.
Other disqualifications include having a prior bankruptcy petition dismissed within 180 days due to a willful failure to appear before the courts.
Federal bankruptcy laws are complex but using them as debt relief tools may be the most appropriate for your situation. When you lean on your resources, follow the process and keep to the repayment plan, the process may turn out smoother than you might fear and might help your future more than you think.