It is important to realize the effects that filing for bankruptcy can have on your credit history. The decision to make this claim can stay on your report for up to 10 years, affecting your chances of securing car loans, mortgages and other types of credit. However, if you must file and you own a significant amount of property other than necessities, Chapter 13 may be for you.
Consumers with a bad credit history can file for Chapter 13 bankruptcy if they hold a lot of home equity that they are not willing to liquidate, or if they receive regular income but are unable to make fixed-installment payments.
To qualify, the borrower must have less than $360,475 in unsecured debt and less than $1,081,400 in secured debt, according to TotalBankruptcy.com.
Under this code, individuals are allowed up to five years to settle debts on delinquent accounts, depending on arrangements made with a bankruptcy trustee. There will be one monthly payment and the borrower will be able to hold onto most of their property. Also, creditors will not be allowed to contact you during this period.