If you struggle with unmanageable debt, a Chapter 13 bankruptcy may seem like your best option. You might have an opportunity to start afresh and move on from some of your financial woes, including possible foreclosure.
However, bankruptcy is never an easy process and if you do not live up to your obligations, your case may go nowhere. With that in mind, here is how you should handle your Chapter 13 bankruptcy plan.
Establish a debt repayment plan
A Chapter 13 bankruptcy involves negotiating a repayment plan with your creditors. You may be able to make your payments more manageable by extending the length of your repayment plan. You could also arrange to repay your creditors through payroll deductions. Make sure to stay in communication with your creditors and keep them updated on any changes to your situation, such as new employment, marriage, or divorce.
Do not incur new debt
It is easy to fall into a habit of taking out more credit cards or taking on new loans because you think you can pay them off later. If you are having trouble keeping up with your current bills, taking on more debt could make the problem worse. However, if you are in a situation where you have to take on some more debt, you must consult with your trustee first.
There are many misconceptions about what a Chapter 13 bankruptcy entails, and you do not want to make assumptions based on those misunderstandings. Instead, you should fully understand the process, its consequences, and how it can help you move forward with a clean financial slate.