What are the disadvantages of filing Chapter 13 Bankruptcy?

Filing Chapter 13 Bankruptcy in California, also known as reorganization bankruptcy, can have considerable disadvantages. The first disadvantage is the length of the process. A Chapter 13 Bankruptcy filing must span a minimum of three years. During this period, all disposable income must be used to pay the bankruptcy trustee, who is in charge of distributing payments to creditors. This means that during this period, you may have considerably less money to use for your daily living expenses than before filing the bankruptcy. Another disadvantage of filing Chapter 13 Bankruptcy is that any debt that is not included in the plan will not be discharged. This means that you may still owe the creditor at the end of the three-year period. Your creditors may also object to the plan and require more money from you. A third disadvantage of filing Chapter 13 Bankruptcy is that it may have a negative effect on your credit score. The filing of the bankruptcy is noted on your credit report and will remain for up to ten years, making it difficult to obtain loans, mortgages, and credit cards. The last disadvantage of filing Chapter 13 Bankruptcy is that even with the plan in place, you will still be liable for any co-signed debt. Your co-signer may still be forced to pay the debt if you fail to keep up with the repayment plan. This can put a tremendous strain on your relationship with your co-signer.

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What are the disadvantages of filing Chapter 13 Bankruptcy?

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