Myths about Chapter 13 bankruptcies: What you need to know.
If you’re considering filing for Chapter 13 bankruptcy, you may have heard a lot of conflicting information and opinions about the process. But with so much misinformation out there, it’s important to separate fact from fiction.
Common Myths About Chapter 13 Bankruptcy
Myth #1: Chapter 13 bankruptcy is only for people with high incomes. This is simply not true. While Chapter 13 bankruptcy does require you to have a steady source of income, it’s available to people of all income levels.
Myth #2: You can’t keep your home if you file for Chapter 13 bankruptcy. On the contrary, many people who file for Chapter 13 bankruptcy are able to keep their homes. In fact, one of the main benefits of Chapter 13 bankruptcy is that it allows you to catch up on your mortgage payments and avoid foreclosure.
Myth #3: You have to pay back all of your debts in full through a Chapter 13 plan. This is another myth. While you do have to make regular payments through your Chapter 13 plan, the amount you have to pay back is often less than the full amount you owe. The amount you pay back will be determined by your income, expenses, and the type of debts you have.
Myth #4: Filing for Chapter 13 bankruptcy will ruin your credit forever. While it’s true that your credit score will take a hit when you file for bankruptcy, it’s not true that your credit will be ruined forever. In fact, many people find that their credit begins to improve within a year or two of filing for bankruptcy, as long as they make all of their payments on time and avoid taking on too much new debt. As time goes on, the bankruptcy will have less and less of an impact on your credit score.
(This post created with the assistance of artificial intelligence.)
Sincerely yours,
Arthur Ray
Arthur Ray Law Offices
We are a debt relief agency. Our Bankruptcy Lawyers in Memphis, TN help people file for bankruptcy under the bankruptcy code.
*For those who qualify under federal law.