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Miami residents who have run out of financial options may decide to file for Chapter 13 bankruptcy relief. Below are some pros and cons of filing for Chapter 13.

PROS

— In most instances, filing under Chapter 13 gives you a longer period to pay off your debts, and often you have more flexibility with the terms.

— Sometimes, you are able to relinquish an item you are attempting to pay off in lieu of making the payments if the debt becomes too onerous.

— If you complete the terms of your repayment plan, creditors can no longer pursue you legally for full payment.

— Once declared, bankruptcy can set you on the road to fixing your credit. Chapter 13 bankruptcies, unlike Chapter 7s, may be filed repeatedly if you have a particularly poor run of financial luck.

— With the exception of child support and student loan debts, bankruptcy can relieve you of almost all debts you have incurred.

— As long as you continue to make payments under the Chapter 13 plan, you are able to keep all property for which you are making payments.

— Even though your credit takes a hit, you usually are eligible for new credit lines after only a few years of your filing; sometimes only one, but expect a higher interest rate.

— If you have filed for Chapter 13 bankruptcy, you may still be able to file for Chapter 7 bankruptcy within a six-year period if you received a good faith discharge on your Chapter 13 bankruptcy and paid off a minimum of 70 percent of your unsecured debts.

CONS

— All Chapter 13 debts are paid out of what is considered your disposable income — whatever income remains after your living expenses are paid. This may leave you with little cash for anything but the barest necessities.

— You will no longer have access to any of your credit cards. This is not necessarily a bad thing, as credit cards typically play a major role in people getting into financial hot water.

A bankruptcy law professional can provide guidance throughout all steps of the process.

Source: FindLaw, “Pros and Cons of Declaring Bankruptcy under Chapter 13” Aug. 20, 2014