Some people assume that filing for bankruptcy completely wipes out all debts, but that's a myth. There are certain types of bankruptcies that actually focus on repaying your debts to creditors. Going this route could be better for your financial future in the long run because you'll actually pay what you owe instead of just washing your hands of it. But getting through a Chapter 13 bankruptcy is easier said than done. If you want to come out on the other side successfully, here are some tips that might help.
Start with a Good Lawyer
Before filing any type of bankruptcy, you should seriously consider hiring legal help. A chapter 13 bankruptcy lawyer can take a look at your situation and come up with a strategy on how to move forward. Hiring a lawyer early on in the process will also make sure you get your paperwork correct and increase the chances of having a court approve your plan. In some cases, a chapter 13 bankruptcy lawyer may even be willing to negotiate with your creditors on your behalf before you actually move forward with the bankruptcy, if doing so would be preferable.
Create a Solid Network of Support
You need more than just a lawyer though to get through a Chapter 13. Again, this type of bankruptcy often focuses on repaying your debts. If you can't currently afford to pay the minimum on those debts, the bankruptcy court will help you create a plan that works, but you need to understand that you will still need to pay at least something every month. To that end, it's a good idea to create a network of family or close friends who will hold you accountable for your spending and financial decisions. Most Chapter 13s can last at least a few years or longer, and you need to make sure you can stay focused for the duration.
Create a Budget
Before a bankruptcy court approves your Chapter 13, they will want to see your income, savings, and debts. They will also want to see that you have a budget in place to be able to afford your repayments. It can help you out in the eyes of the court if you create this budget before you are actually required to by the judge. Talk about it with your lawyer and come up a plan to keep your expenses in check. Post the budget somewhere prominent in your house or in multiple rooms so you always have it at the front of your mind