Chapter 13- Repayment Plan
If you are facing foreclosure, repossession, or garnishment, or if you owe back taxes, then a Chapter 13 bankruptcy (sometimes called Debtor's Court) may be the solution for you. A Chapter 13 will stop foreclosures, repossessions, and garnishments. In a Chapter 13, your debt is consolidated and you make payments to the court so that the debt is paid off over a period of up to five years.
No More Interest or Fees
A Chapter 13 can be very helpful because once it is filed, unsecured creditors (like credit cards and medical bills) do not receive interest, finance charges, or late fees while they are being repaid through the Chapter 13. This helps you dig out from the debt without having more owed every month.
If your paycheck is being garnished because of a judgment, you can file a Chapter 13 placing the entire amount of the judgment in your case. The garnishment will stop since the creditor will be paid through your case.
Repossessions can be prevented by filing Chapter 13 If a vehicle or other item is in danger of being repossessed, you can file a Chapter 13 and place the entire debt in the case. The item will be protected and the creditor will be paid over the time of your case. Remember that your vehicle will NOT be protected until the Chapter 13 is filed. If it is repossessed before you file, you may not be able to get it back.
If a foreclosure is approaching, a Chapter 13 can stop it. If you file the Chapter 13 before the foreclosure date, then you can repay the amount that you are behind on the mortgage through your Chapter 13 plan. (You will still have a regular mortgage payment to make each month). There is a lot that has to be done before a Chapter 13 can be filed, so DO NOT WAIT until the last minute. Contact us well before the foreclosure date so you don't run out of time.
Taxes and Student Loans
Back taxes and student loans can be repaid through a Chapter 13 case.
How Much Will My Payments Be?
Unfortunately, this question is too complex to be answered without knowing each individual's situation. The amount is based on how much you owe, on the interest you owe on secured items, on the length of your plan, and on the percentage you will pay to your unsecured creditors. When you come in for a free consultation, we should be able to determine this amount.