This Article is About
chapter 13 bankruptcy
filing for bankruptcy
mortgage payments
financial obligations
mortgage lender
mortgage company
bad person
financial responsibility
stigma
foreclosure
current situation
debts
Bankruptcy Is A Cash Management Technique
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Bankruptcy is A Cash Management Technique

Filing for bankruptcy does not make you a bad person. Filing for bankruptcy does not make you an irresponsible person. Filing for bankruptcy does not make you a person that is avoiding their financial obligations. Filing for bankruptcy does make you a person who wants to keep their financial obligations and manage them in a much more responsible way. There is a stigma asscociated with bankruptcy in this country. Those who do file bankruptcy are perceived as morally bad people who are running from their financial responsibility. When filing a bankruptcy under Chapter 13 of the Bankruptcy Code, nothing could be further from the truth.

A Chapter 13 Bankruptcy is specifically designed to help people who want to repay some or all of their debts in better terms. These terms would be in the form of better interest rates. People who choose to file bankruptcy under this plan want to keep their financial obligations and manage them in a more effective manner so that they can pay off their debt.

A person's income now and what it may be in the future will determine a monthly payment moving forward. It will also determine how long the bankruptcy payment is made. Depending on the income, the bankruptcy payments will be made for either 3 or 5 years. In essence, by filing, a Chapter 13 Bankruptcy, a person who is struggling to pay their debt, can responsibly take action, restructure their debt, and pay it off in a set period of time. Often much more quickly than if they were to continue struggling in their current situation. Sound irresponsible to you? It doesn't to me.

Suppose a mortgage lender places a homeowner in foreclosure after they have missed only 2 mortgage payments? Now, suppose this same homeowner had been laid off from their job 6 months earlier. And, suppose the mortgage company, after putting the foreclosure in place, would not take a portion of the past due amount? Stay with me. This scenario has happened and is happening all the time. Suppose, other than this person's mortgage, they had made all their monthly payments on time during this time? Suppose filing a Chapter 13 Bankruptcy was the only way for this person to keep their home? Would it be more financially responsible to continue to pay on the mortgage including all past due amounts, or walk away from the home and not pay a dime? Either way, one is choosing to start over financially. But walking away, is running away, from financial responsibility.

A Chapter 13 bankruptcy involves meeting with an attorney who will not only show you how to file bankruptcy but will also help you in doing so by filing the bankruptcy forms and setting up a new payment plan to pay off current creditors based on a person's individual circumstances. Unlike a Chapter 7 Bankruptcy which absolves a person of all debt and requires no restructing or repayment of any kind, a Chapter 13 involves paying off current debt. That includes a mortgage. It also includes car payments and any other secured debt. Wow. A person who files bankruptcy and pays off their debt. That is truly financial irresponsible!


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