Uncontrollable credit card debt has led many American citizens to look for a way out that really works. While some individuals resort to debt settlement programs, others favor the complete judicial protection that is offered by Chapter 13 Bankruptcy. Chapter 13 Bankruptcy assists US consumers to lower their monthly payments on credit card debt. You can become debt free simply within 3-5 years with complete judicial protection. Individuals who have non-exempt assets like rental properties frequently opt for reconstituting their credit liabilities throughout a 3 to 5 year period for the purpose of lowering the monthly payments. At the same time when there would be a negative impact on their FICO scores for up to seven years, those who are facing severe financial difficulties can become debt free.
The Distinction Between Chapter 7 and Chapter 13 Bankruptcy
The main distinction between Chapter 7 and Chapter 13 bankruptcy is that the second permits a consumer to hold non-exempt assets. A consumer is required to surrender any valuables to a trustee if he files for bankruptcy under Chapter 7. Others look for Chapter 13 safeguard regarding car, home and student loans. For taking the advantage, the debtors are likely to make monthly payments for the amount payable to the creditors.
How Long Would It Take to Eliminate Credit Card Debt?
It depends on the amount due. Chapter 13 Bankruptcy, which is also known as a wage earner plan, would let a consumer to rearrange his credit card debt throughout a 3-5 year time period. Monthly payments would be directed to bankruptcy trustee on the basis of the amount of free money that he has. As soon as the debt solution is abided by, any left over obligations are cancelled and the consumer becomes entirely debt free.