- A Chapter 13 bankruptcy is referred to as a wage earner's plan because it requires the filer to make regular payments on the debt over a three to five year period. It allows the debtor to keep their property, such as a home or car. Unlike a Chapter 7 bankruptcy, it does not relieve the debtor of their legal obligation to pay the debt.
- A bankruptcy will appear on your credit report as a public record. It remains on the report for seven years. According to the Electronic Privacy Information Center, a bankruptcy will also lower your credit score by as much as 160 to 220 points.
- Although a Chapter 13 bankruptcy only remains on your credit report for seven years, the impact of it can be lifelong. According to financial expert Dave Ramsey, the applications of lenders and even some employers may ask you if you've ever filed bankruptcy, and these companies may refuse to do business with you if that answer if yes.
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