Trying to dig one's self out of a financial black hole can seem daunting. Paying various creditors while underemployed can seem nearly impossible, especially when most of your creditors aren't willing to budge or compromise. But then again, that's the beauty of bankruptcy. Many debtors try for years to repay creditors using all different types of techniques recommended by so-called financial gurus only to find that they simply owe too much and earn too little to pay off all of that debt in their lifetime. Oftentimes debtors are able to pay off one or two bills and feel triumph only to be hit with another financial disaster that forces them to rely on their credit lines because they have no savings.
And why do they have no savings? Well it's difficult to save when you're paying off this creditor and that bill collector and using every dime you earn just to keep the lawsuits from rolling in. This creates a dynamic where many debtors' self-help methods leave them only half accomplished in their goal of being debt-free and several years more in debt. Bankruptcy takes a more holistic approach to personal financial recovery by realistically looking at a debtor's income and debt and deciding what they can pay and discharging the rest. A debtor in Chapter 13 bankruptcy doesn't need to figure out whom to pay first nor do they need to fight with the creditors.
In bankruptcy, the bankruptcy trustee has the power to tell a creditor that they will get paid less and in a certain order and there is really not much they can do about it. Chapter 13 bankruptcy as well as Chapter 7 bankruptcy , allows a debtor to repay their debts if they can and emerge from bankruptcy ready to begin anew.