There are many misconceptions about filing a Chapter 13 Bankruptcy in Nebraska. You may have heard that filing a Chapter 13 bankruptcy is better for your credit or that you will have to pay all of your creditors back in full. Let’s take a look at these common myths about chapter 13 bankruptcy—what’s true, and what’s false?
4 Common Myths About Chapter 13 Bankruptcy
Myth #1: A Chapter 13 Bankruptcy is Better for Your Credit Report
Over the long term, a Chapter 13 Bankruptcy stays on your credit report for 7 years from the date the bankruptcy is filed. However, a Chapter 7 stays on for 10 years. While the Chapter 13 falls off your credit report faster, a Chapter 7 offers the opportunity to begin rebuilding your credit 100 days after filing. Either way, you have an easier path to rebuild your credit, so it is important to file the Chapter that best suits your needs.
Myth #2: I Will Have to Pay All of My Creditors In Full in a Chapter 13
This simply isn’t true, unless your income is so high that you can afford to pay back all of your creditors in full. In most cases, you’d pay just pennies for every dollar you owe to credit cards and medical debts. Chapter 13 filers can save money on secured creditors (car loans) too. Chapter 13 lets you pay just what the car is worth, not what you actually owe, on loans older than 2 ½ years.
Myth #3: I Will Be Locked Into the Exact Same Payment for the 3 to 5 Years
Your payment isn’t frozen in place for 3 to 5 years. If you lose or switch jobs and have income or other financial changes, we can reduce your Chapter 13 payment.
Myth #4: I Won’t Be Able to Get a Replacement If My Car Breaks Down During the Bankruptcy
False! We help Chapter 13 clients get loans to purchase a replacement vehicle during their bankruptcy all the time. Court permission is required, but it’s a simple process, and no court hearing is necessary.
More Questions About Chapter 13 Bankruptcy in Nebraska? Contact Us Today!
At Steffens Law Office, our bankruptcy attorneys have over 50 years of experience filing bankruptcies and we know that we can help you too. Call Steffens Law Office today at 308-872-8327 to determine if filing a Chapter 13 Bankruptcy would be the right fit for you.
Dedicated to helping you achieve a fresh financial start.
WILLIAM V. STEFFENS
JEREMIAH J. LUEBBE
ANNA J. BURGE
Steffens Law Office, P.C.