What Are The Possible Downsides Of Chapter 13 Bankruptcy?

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Many important financial decisions come with their share of disadvantages, especially for people who struggle with debt. With the stigma surrounding bankruptcy, it’s common for people to focus on the negative aspects of filing for bankruptcy. In reality, the courts can benefit debtors during the bankruptcy process by helping them effectively reorganize and repay their debts. Still, you might wonder about the possible downsides you can come across when filing for Chapter 13 bankruptcy. Don’t worry because our knowledgeable law firm has the answers you need! To learn more about this topic, read on or reach out to an Orange County Chapter 13 Bankruptcy Lawyer for individualized legal counseling.


Many financial experts agree that filing for bankruptcy can often provide debtors with more benefits than disadvantages. However, it’s inevitable that

  • The process can take up to five years.
  • Chapter 13 bankruptcy can stay on your credit record for up to 10 years, which could make it difficult to obtain other loans and credits in the future.
  • Chapter 13 bankruptcy doesn’t relieve child support or alimony obligations.
  • Your student loan debts can’t be dismissed.
  • You might still need to worry about paying back mortgage liens in the future.

The most common complaints about Chapter 13 bankruptcy are regarding the time that the process takes and the impact on your credit score. Our firm has found that in many cases, the benefits of this bankruptcy process make up for the disadvantages.


Most law professionals and financial analysts believe that filing for Chapter 13 bankruptcy can still be highly beneficial to some debtors, even if there are some downsides. Here are just some of the ways that you can benefit from Chapter 13 bankruptcy:

  • The court will completely reorganize your debts to help you determine the best way to handle repayments.
  • The court will establish a thorough plan for how you will repay your debts and sort out your finances.
  • Your unsecured debts (like credit card debts) will be discharged. You won’t need to worry about paying them back.
  • You will be able to catch up on paying back secured debts, so you don’t lose your important assets.
  • You most likely will be able to keep your home.
  • The lengthy process buys you time to learn how to handle your finances more responsibly in the future.
  • Your loan co-signers won’t face any consequences.

Are you struggling with debt and considering filing for Chapter 13 bankruptcy in New York? You might want to speak with a trusted bankruptcy lawyer who can help you to determine your best options moving forward. Thankfully, our highly experienced legal team is on your side! Contact the Law Offices of Michael D. Pinsky today for an initial consultation.

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