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For many struggling individuals, bankruptcy is often the answer. However, not everyone is eligible to file the common Chapter 7 bankruptcy. For those people, Chapter 13 is the only means to debt freedom. Although Chapter 13 bankruptcy does eventually provide filers with a fresh financial start, there is one major challenge to seeing the Chapter 13 process through to the end.

As you may know, Chapter 13 bankruptcy is a debt restructuring plan. Under this plan, a trustee will construct a manageable repayment plan over the course of three to five years. These payments are typically more flexible and affordable than without filing and work to give individuals more time to meet their obligations. Unfortunately, this extended repayment period also poses significant challenges. One of which is part of the very foundation of how these affordable payments are calculated.

In a Chapter 13 bankruptcy, the restructuring of debts is based an individuals disposable income. For financially struggling families, this disposable income may be extremely low, which helps to keep payments minimal but also eats up any additional cash a family has at the end of the month.

To have a Chapter 13 bankruptcy successfully discharged, payments must be kept up and made on time. During three to five years, while these payments are being made, families might find they are just as strapped financially as they were before filing. Although this may seem counter-intuitive, it works to help families meet their financial obligations while accounting for the necessities of daily life.

For families whose income is too high, Chapter 7 bankruptcy may not be an option. Fortunately, Chapter 13 bankruptcy may give these families the fresh start they deserve. Understanding the basics behind a successful Chapter 13 bankruptcy may require the help of a trusted attorney. With their knowledge, families can make an informed decision and begin to tackle their financial struggles.