When there is a need to file bankruptcy, you have two choices – Chapter 7 and Chapter 13. Bankruptcy lawyers in Covington, GA opine that between these two options, Chapter 13 is better for the future in more than one way, be it with regard to your credit rating, employment opportunities or applications for loans and insurance. Below given are the repercussions of filing under Chapter 13.
* Although bankruptcy is not taken lightly by lenders, they are more lenient when you file under Chapter 13 because it indicates that you have every intention of repaying a loan. So, you stand a better chance of being granted a loan
* The same logic applies to insurance companies as well. Although you have to pay higher premiums, you can be confident of getting insurance
* As you continue to repay loans and they are removed from your credit record, your credit score improves, although very gradually. It might take as much as seven years to get on the positive side of the score. However, with Chapter 13, you have a better chance of improving the rating faster and more effectively.
* When you file bankruptcy under Chapter 13, you can talk to your lawyer in Covington, GA about including clauses which explain reasons for bankruptcy. Genuine situations such as poor health, unemployment and family crises improve your standing with future lenders. However, do not include false excuses.
* Since you do not lose many of your assets, you have a better chance of rebuilding your future. What is more, you do not have to rebuild from scratch since you still get to keep your business. It is easier to secure your future all over again when you file under Chapter 13.
* The restructured loans come at very low interest rates and in some cases, you need to pay only the principle with zero percent interest. Restructuring is done taking your convenience into consideration. So, your burden is largely decreased. The major advantage of this facility is that you can repay your loans more easily and improve your credit rating more effectively.
In all, you can be confident that Chapter 13 is good for your future. Nevertheless, you need to understand the negative implications. Unlike Chapter 7, Chapter 13 does not help you get rid of debts within a short period. If you cannot repay as per restructured loan plan, you could enter a more stressful phase. Failure to pay as per the new plan also causes a serious dip in your credit rating and neutralizes all the above mentioned benefits. So, you should opt for Chapter 13 only if you are confident of repaying the restructured loan. Otherwise, the future could get darker and more troublesome. Before you take a decision, get in touch with an attorney who can help you make the best choice.