Is it a pain for you to make minimum payments on your bills? If yes, then you must look for non profit debt consolidation program that can help you repay your debts soon. But if you’re unable to mange your debts after you’re provided with a debt repayment plan, then you can file a chapter 13 bankruptcy. But before you do so, you must know certain facts that will help you clear your misconception regarding this process.

3 Unknown facts of chapter 13 bankruptcy

Is bankruptcy a difficult process?

Filling a bankruptcy is not a difficult process. All you have to do is to hire an experienced and a qualified bankruptcy lawyer who is capable to understand the legal prints and will assist you during the process. You have to fill up the required form and wait for the court order. The court will offer you a debt repayment plan which you must follow to repay your debts within 5-7 years.

Debts that remain after filing a chapter 13 bankruptcy have to be paid in full?

While you’ll file a chapter 13 bankruptcy, you must know the fact that it will help you discharge only those debts that have been mentioned in the plan. Other debts that have not been included in the plan will remain as it is. You have to repay those debts in full even after you have discharged your debts through bankruptcy. The type of debts that you can discharge through chapter 13 bankruptcy are, educational cost, drunk driving liabilities, restitution obligations, criminal fines and few long term obligations such as home loans and many more.

Can you rebuild your credit record after filing a bankruptcy?

When you’ll file a chapter 13 bankruptcy, you’re credit score will get reduced by almost 250 points and can stand as low as 450 points. Thus, you’ll loose the opportunity to take out any further loan within few years. Apart from that, the credit bureaus will highlight your name in the bankruptcy column of your news paper. Thus, your credit score will be seriously hurt. But you should not loose you hope instead try to opt for credit repair tips that can help you rebuild your credit score.

Lastly, in a chapter 13 bankruptcy, if you enter in a wage earner’s plan, then you have to commit that you’ll utilize your disposable income towards repayment of your debt. If your income increase within the payment period, then you must take the suggestion of bankruptcy lawyer whether or not, you can make more payment towards repayment of your debts. Since your trustee will keep a track of your debt payments, he/ she can even ask you to increase your debt payments if your earning gets boosted.

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