If you have the choice to use either Chapter 7 bankruptcy or Chapter 13, it is vital for you to evaluate the pros and cons of each chapter before choosing one. If you are leaning towards Chapter 13, here are the top pros and cons you should know about before you file your case.

The pros of Chapter 13

Chapter 13 offers a lot of great benefits for people in certain situations. The first benefit is that it offers relief from debt collectors. Through bankruptcy, you will receive an order from the court for protection, and this is called the automatic stay. Basically, what this does is prevent your creditors from bothering you for the money you owe them. Secondly, Chapter 13 offers the benefit of giving you more time to catch up on past-due debts you owe. Your debts will be consolidated, in a sense, and you will have an affordable payment to make each month that covers all the bills you owe.

Another key benefit of this branch of bankruptcy is that it allows you to stop a repossession from occurring, and it also stops foreclosure. If you are facing either of these events, using Chapter 13 could offer you tremendous benefits. You should also know that when you finish making the payments on the plan, there is a good chance the trustee will discharge some of the debts you still owe, especially if you still owe money for credit cards. This will only happen, though, if you successfully finish the plan you created at the start of your case.

The cons of Chapter 13

There are also a few drawbacks of using a Chapter 13 case. The first is that you will be tied to a repayment plan for up to five years, and you will be required to make every payment stated on your agreement. If you miss payments, you risk getting your case dismissed, so you should never miss a single payment if you use this branch. A second downside of any type of bankruptcy is the negative effects it has on a person's credit report. Your credit score will likely drop after filing, and this can affect your credit for 10 years in some cases.

Before you make any decisions about bankruptcy, make sure you fully understand the benefits and consequences of it. You can learn more about these things by visiting a Chapter 13 bankruptcy lawyer in your city.