New York Chapter 13 Bankruptcy Attorneys

Disadvantages of Filing Chapter 13

Although Chapter 13 bankruptcy has certain advantages for the individuals who file under it, there can be some disadvantages that you should be aware of.  The advantages of filing under Chapter 13 significantly outweigh the disadvantages, but our lawyers feel that clients should be fully informed about every aspect of this legal process before they decide to file bankruptcy.  When it comes to your finances, it is important that you be aware of all the possible effects of filing bankruptcy under Chapter 13. 

The exact disadvantages of Chapter 13 bankruptcy will differ depending upon the case, so it is important to speak with a New York Chapter 13 bankruptcy lawyer about any possible downfalls to filing under this Chapter of bankruptcy law.  Some of the possible disadvantages may include the following:

• Chapter 13 bankruptcy may remain on a person’s credit report for up to 10 years, affecting their ability to qualify for credit, loans, apartments, and other items that require credit approval.
• Individuals who have declared Chapter 13 bankruptcy may need to obtain the permission of a bankruptcy trustee before being able to apply for or receive additional credit.
• A case involving Chapter 13 bankruptcy can last anywhere between 3 and 5 years, maintaining the debtor’s status as  “bankrupt” during this time.
• If there is an increase in a person’s income over the life of their bankruptcy case, they may face an increase in the monthly payment amount.
• Although the debt repayments are lower for a longer period of time, individuals may end up paying more of a percentage of their overall debt than those who choose to file under Chapter 7. 
• There are limits as to how much debt you can have in order to qualify to file under Chapter 13.

To learn more about the possible disadvantages of filing under Chapter 13, contact a New York Chapter 13 Bankruptcy Attorney at Jacoby & Jacoby!