How Chapter 13 Bankruptcy Can Affect Your Future

by Hank Coleman

Chapter 13 BankruptcyIf your debt has got out of control, don’t let this be a burden to you. There are steps that you can take to get out of debt. One such way includes filing a Chapter 13 bankruptcy. By filing for Chapter 13, you can regain power of your financial status by acquiring a payment plan that fits nicely into your budget. Let’s take a close look at what a Chapter 13 bankruptcy can do for you.

  • Protect your assets
  • Eliminate interest, and in some cases all of it
  • Help you stay in control of your assets
  • Consolidate your debts into one monthly payment
  • Eliminate junior mortgages
  • Reduce your car payment
  • Eliminate your unsecured debt
  • Protect co-signers
  • No liquidation


When you file for Chapter 13 bankruptcy, the following will stop immediately:

  • Tax collection
  • Lawsuits
  • Tax penalties
  • Harassment from creditors
  • Bank levies
  • Evictions
  • Tax interest
  • Wage garnishments
  • Foreclosures
  • Repossessions
  • Utility disconnections
  • Collections on public benefit overpayments

Things to Know About Chapter 13 Bankruptcy

When filing Chapter 13 bankruptcy, your assets are fully protected. You don’t have to worry about losing your car or home. In fact, there is no need to worry about losing anything. Any unsecured debt that you have can be completely eliminated. The only thing you will have to pay for are any secured loans that you have; however, on the bright side, your payments on such loans can be lowered to an amount that you can afford.

Repayment Plans For Chapter 13

If not all of your debt is eliminated through a Chapter 13 bankruptcy, you and the court will come up with a repayment plan. Most times, this repayment plan will last anywhere from 12 to 36 months. That means that an affordable payment can be secured for you in which you can be completely out of debt in less than three years.

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If something were to happen during your repayment plan, such as loss of a job or a sudden illness, the terms of the repayment plan can be modified. It is not at all uncommon for the court to order creditors to forgive your debts in the event that you cannot meet the terms of your repayment plan; however, you must prove to the court that there is good cause as to why you cannot make the payments.

The amount of money that you are ordered to pay as part of your repayment plan will not be so high that you cannot afford it. In fact, for many people who file this type of bankruptcy, there monthly repayment amount is less than $100 a month.

If you are looking for a way to get yourself out of debt without going further into it, a chapter 13 bankruptcy will be of great benefit to you. Such a bankruptcy is a great way to start rebuilding your credit, which will in turn lead to you regaining control of your finances. From stopping a foreclosure to ridding yourself of credit card debt to eliminating past due taxes and medical bills, a chapter 13 bankruptcy is definitely something you need to consider.

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About Hank Coleman

Hank Coleman is the founder of Money Q&A, an Iraq combat veteran, a Dr. Pepper addict, and a self-proclaimed investing junkie. He has written extensively for many nationally known financial websites and publications. Hank holds a Master’s Degree in Finance and a graduate certificate in personal financial planning. Email him directly at Hank[at]MoneyQandA.com.


Hank Coleman has written 575 articles on Money Q&A. Learn more about Money Q&A on Twitter @MoneyQandA and @HankColeman.


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