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What is Chapter 13 Bankruptcy?
Sims Bankruptcy Law provides debtors with debt relief through Chapter 13 bankruptcy. Chapter 13 is also known as a repayment plan over thirty six to sixty months. The “repayment plan” moniker is somewhat misleading in that you will not necessarily repay all of your debts. The amount that you will need to repay is dependent on a number of factors such as your income, expenses, household size, and number of claims that file, just to name a few.
Chapter 13 can be a good option for those that are behind on car payments and facing repossession, those that are behind on mortgage payments and facing foreclosure, those that have high interest on their car payment, those that have a high income compared to their household size, and those that have tax debt or are behind on child support.
My home has been listed for foreclosure, what can I do?
A Chapter 13 repayment plan will allow you to keep your home and prevent the foreclosure proceeding from taking place. In a chapter 13, you will have a maximum of 60 months to repay the arrearage that you owe to your mortgage company. You will pay a Chapter 13 trustee a certain amount of your disposable income and in turn, the Chapter 13 trustee will pay the mortgage company to catch up the amount you are behind. You will also pay the mortgage payment going forward directly to them so at the end of the Chapter 13, you will be totally caught up on your mortgage payments.
My car is old but I still owe alot and have a high interest rate, is Chapter 13 helpful to me?
Should you have a car that you have been paying on for a while, Chapter 13 may be a good option for you. If your vehicle was purchased more than 910 days from the time of the bankruptcy filing, you can cram down the value of your vehicle to what it’s worth in today’s values. Your Chapter 13 Plan will tell the Chapter 13 Trustee to pay only the fair market value at a low interest rate. The remaining balance that doesn’t get paid will get treated the same way your credit card debt does in your Chapter 13 Plan.
What’s the process to get a Chapter 13 going?
First, you’ll need to contact a bankruptcy attorney. Tyler Sims at Sims Bankruptcy Law is a bankruptcy attorney that is available to help you determine your path forward.
Second, the attorney will gather all necessary information to determine your Plan payment and amount that you will repay.
Third, you will sign all the documents, plan and schedules and the attorney will file the case. The court filing fee for a 13 is $310.00.
Fourth, similar to a Chapter 7, you will attend a meeting of creditors with your attorney at the Chapter 13 Trustee’s office.
Fifth, the creditors and the trustee will have a chance to object to the confirmation of your Chapter 13 Plan. They may object to the way a particular creditor is being treated related to the amount being paid, interest rate being paid, or classification of the debt.
Sixth, the Chapter 13 Plan will be confirmed by the Bankruptcy Court once all objections have been resolved.
Brief list of things to consider:
- Always be truthful in disclosing everything to the attorney, even if you believe it is not relevant or useful
- Remember to update your attorney with any changes in income either up or down
- If you have a question or concern about your case, ask your attorney to explain it to you. You are paying them to represent you, so you should have an understanding of what’s going on. A lot of Chapter 13 is very complex but a general understanding is good for you to have
- Make your Chapter 13 Plan payments on time, if you cannot, contact your attorney