If you have recently found out that you are ineligible for a Chapter 7 bankruptcy or if you have decided that this is not the right option for you, it is likely that you are considering filing for Chapter 13 bankruptcy instead. In many ways, given the right situation, filing for Chapter 13 bankruptcy can be a far better decision all around. It will have a less negative impact on your credit score, and it will also allow you to keep and applicable assets that you may have.

Before making this all important decision, however, it is crucial that you speak with a knowledgeable bankruptcy attorney or some other type of financial advisor or expert. This individual will be able to properly and thoroughly assess your situation and determine if you will be able to qualify for and meet the financial demands of filing for Chapter 13 bankruptcy. In contrast to filing for Chapter 7, in which your assets would be seized to pay off creditors, you will have to create a plan for paying off your debtors. You must prove that you can handle the responsibilities of the plan, and you must also have it approved by a federal bankruptcy court. This can be a somewhat long and arduous process, but with the proper help it can end up benefiting you greatly in the long run.

The most difficult part of the process is creating the Chapter 13 Plan referenced above. This plan must comply with several different rules and regulations, often varied by state, and must show that creditors will still receive as much money as they would have if you had opted to file for Chapter 7 bankruptcy or any other type of bankruptcy. You must also prove that you have enough disposable income to pay off the creditors in full during the pre-specified amount of time outlined in the plan. Without the proper assistance, it can be next to impossible to properly understand and draw up this plan so as to have it approved.

Obviously then, filing for Chapter 13 bankruptcy is not a decision that should be entered into lightly. Though it will not impact your credit for ten years, as a Chapter 7 bankruptcy would, it will still remain on your credit report for 7 years. During this time, you may have some difficulty securing housing, loans, or other forms of credit. However, if done correctly, you will also be given the benefit of a fresh financial start and a new opportunity to build and restore your credit. Be sure that you research all of your options and that you fully understand how this choice will affect you. While filing for bankruptcy should never be anybody’s first choice, it can be a viable and helpful option depending on your financial situation and your repayment abilities.