Chapter 13 Bankruptcy
Chapter 13:
A chapter 13 bankruptcy is also called a wage earner's plan. It enables individuals with regular income to develop a plan to repay all or part of their debts. Under this chapter, debtors propose a repayment plan to make installments to creditors over three to five years.
Chapter 13 offers individuals a number
of advantages over liquidation under chapter 7. Perhaps most
significantly, chapter 13 offers individuals an opportunity to save
their homes from foreclosure. By filing under this chapter,
individuals can stop foreclosure proceedings and may cure delinquent
mortgage payments over time, and at 0%.
You must make all
mortgage payments, on your 1st mortgage, that come due during the chapter 13 plan, on time, in order to keep your plan in place. You do not need to make any mortgage payments on any 2nd trust deeds. In Fact, we can strip off 2nd mortgages, if your home is worth less than than your 1st mortgage balance.
Another advantage of chapter 13 is that it has a special
provision that protects third parties who are liable with the debtor
on "consumer debts." ie co-signers. This provision will protect co-signers from all collection.
Finally, chapter 13 acts like a consolidation loan, under which the individual makes the plan payments to a chapter 13 trustee, who then distributes payments to creditors. Individuals will have no direct contact with creditors while under chapter 13 protection.
Any individual, even if self-employed
or operating an unincorporated business, is eligible for chapter 13
relief as long as the individual's unsecured debts and secured debts are less than an amount set by the Government. A corporation
or partnership may not be a chapter 13 debtor.
Call us today for a FREE consultation on your Bankruptcy rights.
We will calculate your plan, so you will know what you will be expected to pay each month. If you have an unexpected change of circumstances to your income , the Court will allow you to apply for a modification of your plan. The Court and our office, will do all we can to help you complete your plan.
The Trustees office will take a close look at your case, and may make a request for an increase of your payments if they think you have the ability to do so. This is why it is so important to have our office carefully review your information, and present a plan that the Trustee's office will accept.
While it is true you will have to live on a strict budget, you will have a clear path to pay back all of your debts at a rate you can afford. There will be no interest on these bills while you pay them back, and depending upon your income, you will pay back just a small percentage of your debt, but get the benefit of deeming them "paid in full", at the conclusion of your plan.
Call us today to explore all of your options under Chapter 13.
