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A Chapter 13 bankruptcy filing may be the smart way to go

Bankruptcy is a choice that many people make as a way to attain financial freedom. In this day and age, financial freedom is important because it gives people a sense of clarity and direction when it comes to their finances. Now, financial freedom means different things to different people. Some people do not like having any type of debt and will do anything to ensure that their debts are paid in a timely fashion. Normally, these are the same people that have a good understanding of how to handle their debt. Then there are the rest of us, who constantly are battling creditors and trying to find ways to live that debt-free existence. For those who fall into the latter category, bankruptcy is a viable option, because it gives individuals who are drowning in debt a way out, so to speak.

There are many different types of bankruptcy filings from which one can choose. Depending on the nature and circumstances surrounding your debt situation, one filing may be more appropriate than another. For instance, a Chapter 13 bankruptcy filing is a filing in which the person still takes responsibility for their debts, albeit in a very different way. Chapter 13 allows for the debtor to set up a repayment plan to repay some or all of the debts over a specified amount of time, which usually lasts no longer than five years. Because bankruptcy filings are legal proceedings, the courts have to accept all proper and eligible filings. Once a Chapter 13 filing is approved, the repayments restart and, during this time, creditors cannot harass or take collection action against the filer.

Bankruptcy may seem like the golden ticket for many, but there are clear advantages and disadvantages to any type of bankruptcy filing. For one, a bankruptcy usually remains on one's credit record for a number of years and this could impact future purchases, especially large-scale purchases. With that being said, it is important to research all aspects of bankruptcy prior to filing in order to ensure that it is appropriate in your situation.

Knowing the ins and outs of bankruptcy can go a long way toward attaining financial peace of mind.

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