Finding the best way to handle outstanding debt is different for everyone. Your particular financial details will differ greatly from someone else's, and though you may both struggle with considerable debt, important other factors may determine which debt relief avenue best suits your circumstances.
If you have the ability to generate a steady income, but have become overwhelmed with outstanding balances nonetheless, you may qualify for Chapter 13 bankruptcy. Though you may balk at the idea of filing for bankruptcy, it does not have to be the outlandish suggestion that many people consider it to be.
Bankruptcy has benefits
Though bankruptcy has many upsides, it also has a negative reputation due to the stigma associated with it. Many people believe that filing for bankruptcy will forever damage their credit and leave them worse off than before filing. However, that is typically not the case. Individuals can work to rebuild their credit and create a more stable financial future after completing the bankruptcy process.
Though there are multiple types of bankruptcy, Chapter 13 may best suit your circumstances because you generate a regular income and can likely pay back your outstanding debts over time. You will need to create a repayment plan that includes details about how you will pay your bankruptcy trustee each month, how much you will pay and how long you anticipate having to follow your plan. Average Chapter 13 cases last approximately three to five years.
Though you will utilize a repayment plan, Chapter 13 may not hold you to the obligation of paying off the entirety of all of your outstanding balances. Debts fall into different categories, and you will need to pay your priority debts in full, which include student loan debt or tax debt. When it comes to your secured debts, like a car loan, you will pay those loans back over time and bring any missed payments up to date. Lastly, your unsecured debts take the lowest priority and may qualify for discharge.
Is it right for you?
Of course, you may have a hard time deciding whether Chapter 13 is truly right for your predicament. In order to make an informed decision, you may want to discuss your particular financial details with an experienced Wisconsin attorney who can offer reliable insight into this debt relief option and explain how it could affect your debts.