The decision to file Chapter 13 Texas bankruptcy can be a complicated one. Advice on the subject can be mixed, making it hard to tell whether Chapter 13 Texas bankruptcy is right for you. Here, we will address a few common bankruptcy myths surrounding the filing process.
Bankruptcy Myths: Repayment in Full
One common myth surrounding Chapter 13 restructuring is that you will have to pay the entirety of your outstanding debts. In fact, the restructuring plan generally involves a significant reduction in the amount owed. Filing Chapter 13 Texas bankruptcy means organizing your debts into a monthly payment, the amount of which is determined by your disposable income. The term of the repayment is between three and five years. In other words, after three to five years of on-time payments of this reduced amount, the remainder of your debt is discharged under the Texas bankruptcy plan. In most cases, this means a drastically reduced debt amount.
Bankruptcy Myths: My Credit Will Be Ruined
Many fear that a Texas bankruptcy filing will mean the permanent destruction of their credit score. In fact, the bankruptcy stays on your credit history for seven to ten years, during which time your score is likely to improve, as the restructuring enables you to make regular payments. In addition, filing for bankruptcy converts your delinquent debts to “current” status, so if you have delinquent loans hurting your credit, they will stop dragging you down.
In many cases, Chapter 13 is the best option for your future. Consult a bankruptcy attorney to help you decide your path.