Chapter 13 Reaffirmation Under The New Bankruptcy Code

Chapter 13 Reaffirmation Under The New Bankruptcy Code "Chapter 13 bankruptcies have been filed at the lowest incidence since the 2005 Bankruptcy Code became law. After modifying the code, Congress is unsure of what is occurring. First, a Chapter 13 bankruptcy plan requires disposable income, and as the recession continues, many more people are unemployed. One of the primary reasons for filing Chapter 13 is the preservation of your property's equity, but many individuals are currently underwater on their home. This, along with having to spend five years bringing your mortgage current, can be a disadvantage of registering under this chapter. If the same individuals can qualify for Chapter 7 and have all their unsecured debts discharged, they would prefer not to pay under a Chapter 13 payment plan for five years.With the new bankruptcy law in effect for five years, debtors are required to reaffirm their secured property debts in the majority of cases. Prior to the 2005 Bankruptcy Code filings, there was no requirement to choose. Once upon a time, lenders were content to take payments from debtors, and borrowers were pleased to retain ownership of their valuable property. The only benefit of reaffirming for a bankruptcy filer is receiving credit for continuing to make payments on time, which helps their credit scores recover more quickly after bankruptcy. When you reaffirm a debt in bankruptcy, you forfeit the bankruptcy protection and the debt remains with you until it is paid off. If you reaffirm a home loan, you will have ongoing responsibility for the property. If you are able to avoid reaffirming your mortgage, you will have no future liability on the property. This means that if the value of your property declines below what is owed, you can walk away without the risk of being liable for a deficiency.Although many believe so, bankruptcy is not a derogatory term. It is preferable to never have to declare bankruptcy. Sometimes good people make poor financial judgments or are forced into bankruptcy by circumstances beyond their control. This is why bankruptcy was created: to assist good people whose finances are thrown into disarray by calamities such as job loss or severe illness. In many instances, filing for bankruptcy will halt creditors long enough for the debtor to recover. Individuals are not exploiting the system so long as they did not incur debt with the intention of declaring bankruptcy to eliminate their debt. Remember that your creditors assumed the risk that you might not be able to repay them. If you are already behind on your expenses, filing bankruptcy will not worsen your credit score due to the late payments. If you're at your wit's end attempting to pay your bills, declaring bankruptcy may give you the breathing room you need.
" - https://www.affordablecebu.com/