If it comes time to consider Chapter 13 bankruptcy, you need to make a list of the pros and cons as they pertain to your personal and financial situation.
There is a lot to like about Chapter 13 bankruptcy, also known as reorganization bankruptcy. At the same time, if you make any mistakes, it could lead you down the wrong path and make you wonder if this was truly the right decision.
Here are several Chapter 13 bankruptcy mistakes that others have made before you:
-- Believing that Chapter 13 bankruptcy is your only option, thus overlooking the benefits of Chapter 7.
-- Running up more debt before you file for bankruptcy.
-- Transferring assets out of your name in an attempt to hide something from the bankruptcy court.
-- Neglecting to file all the required paperwork.
-- Missing deadlines.
-- Not being prepared for the repayment plan that is sure to be put into effect. This can last anywhere from three to five years.
It is easy to believe that filing for Chapter 13 bankruptcy will fix all your problems in no time, but this is actually a complex process that takes many years to reach its end.
There are good reasons to file, as well as some that may keep you away for the time being. If you avoid mistakes along the way, it is much easier to stay on track and keep your mind in a good place. The more knowledge you have of common Chapter 13 bankruptcy mistakes the easier it is to avoid them.
Source: All Business, "13 Mistakes to Avoid When Filing Chapter 13 Bankruptcy," accessed Jan. 12, 2016