Getting behind on mortgage loan payments can create a significant amount of stress for a Brownsville resident. The prospect of losing the family home will often cause a homeowner to begin looking for a viable debt relief option. For many people, Chapter 13 bankruptcy provides the needed relief, though it may not be for everyone.
It is true that for many Brownsville residents, filing under Chapter 13 provides the ability to keep their homes. Filers propose a debt repayment plan lasting from three to five years that must be approved by the court. With that approval, the payments begin. Ordinarily, at the end of the repayment period, if all legal requirements are met and all required payments are made, the court issues a discharge for certain remaining unsecured debts, and filers can remain in their homes as long as they continue to make their mortgage loan payments as agreed thereafter.
However, there are some downsides to filing bankruptcy. A person's credit will experience at least some impact afterward. A Chapter 13 bankruptcy will remain on the filer's credit report for seven years. However, the impact of a foreclosure, delinquent accounts and other negative reports often has a larger impact, especially if the filer takes advantage of the fresh financial start bankruptcy provides and has only positive reports after the discharge.
The impact to people's credit reports may not be the only negative consequence they could experience after filing Chapter 13 bankruptcy. However, for most people, those ramifications are outweighed by the ability to keep their homes and achieve the opportunity to start over financially. The only way to know for sure whether the pros outweigh the cons is to conduct a thorough examination of one's financial circumstances, the ability to adhere to a repayment plan during the bankruptcy and the post-discharge financial gains.