Wisconsin residents who decide to file for bankruptcy can then start to examine the two most common options. Chapter 13 bankruptcy is one of them, and it can have both benefits and drawbacks depending on a person’s situation.
FindLaw shares the benefits of Chapter 13 bankruptcy. The biggest potential boon for many is the possibility of avoiding foreclosure through this filing. Not only will someone be able to legally halt the foreclosure proceedings where they stand, but they will also be able to open up the possibility of paying off delinquent mortgage payments over time. Even car loans and missed mortgage payments can be made up for. This is not the case with Chapter 7 bankruptcy, which tends to be viewed as strict and somewhat unforgiving. Chapter 13 also allows a person to reschedule debt and follow their own payment plan that’s best suited to them. Finally, it only shows on a person’s credit report for 7 years compared to 10 years for Chapter 13.
The American Bar Association lists the cons associated with Chapter 13 bankruptcy. For example, it will still create a black mark on a person’s credit report even if it will only last 7 years compared to 10. That’s still a long amount of time to struggle with the mark of bankruptcy. Chapter 13 bankruptcy also depends on a person being able to have enough of an income source to pay off debts, as the debt payment plan won’t work otherwise. For anyone in a tight money crunch, this may not be feasible.
Careful research of all bankruptcy options will allow a person to select what will benefit them the most. This is just one possibility among many.