You’ve been working hard to stay out of debt and to make sure you can pay your bills, but the debts have really piled up. You tried not to add to it, but you’ve found that your interest rate is making your debt grow even though you’re paying the minimum payments each month.
What should you do to get out of debt?
It may be time to speak to an attorney about filing for bankruptcy. A Chapter 13 bankruptcy is a wage-earner’s plan, which means that you’ll still need to pay back a portion of what you owe through monthly payments. However, those payments may be significantly reduced from what you owe today, allowing you to get ahead on your debt.
Additionally, with a Chapter 13 bankruptcy, you’ll likely end up out of debt within three to five years, which can give you the excellent restart on your finances that you’ve been looking for.
Chapter 13 bankruptcy is usually the type of bankruptcy people who are still working choose, but only if they don’t meet the qualifications for a Chapter 7 bankruptcy. Both have benefits and downsides, so if you haven’t considered looking into Chapter 7, you might want to talk to your attorney about it. If you discover that you cannot pass the means test, then filing under Chapter 13 may be the right choice for you.
Our website has more information available on both Chapter 13 and Chapter 7 bankruptcies, so you can learn about them and se whether either could be a way out of debt for you.