When you are struggling to pay minimum payments on your credit cards, your car payments are behind, and you can’t seem to pay your mortgage on time, a Chapter 13 bankruptcy may be perfect for you. Filing for Chapter 13 bankruptcy will help reorganize your debts and, as a result, you can be debt-free in 3-5 years.
Benefits of Filing for Chapter 13 Bankruptcy
The moment you file for chapter 13 bankruptcy,
- As soon as you file for bankruptcy, you will no longer receive phone calls from collection agents. Notices that you continually receive in the mail will cease. You will be able to refer all of your creditors to the lawyer you have hired to handle your bankruptcy.
- As you work to reorganize your debt with your chapter 13 bankruptcy lawyer, all actions that have been filed against you, including foreclosures, wage garnishments, and repossessions will also stop.
- As part of your bankruptcy filing you will be able to cure the defaults on your mortgage and car payments.
- Money that you owe to unsecured creditors such as credit cards and past medical bills can be reorganized, and you will owe less than you do now with a specific time period in which to pay back this debt.
- Once you file for bankruptcy, your credit rebuilding begins.
Interest and penalties make your unsecured debt go quickly out of control. The amount you owe is generally far more than what you actually spent in the first place. When you file for Chapter 13 bankruptcy, part of reorganizing your debt sets the amount you will pay back, and the payments will be based in part on your ability to pay back your creditors.
Chapter 13 Bankruptcy Plan Requirements
If you filed for Chapter 13 bankruptcy, you must submit a repayment plan explaining how you plan to pay your debts and how much you plan to pay. Some of the requirements include:
- The length of time the plan will last. If your income is below the median of your state, it will be for three years. If your income is above the median of your state, your repayment plan will last for five years.
- A list of all creditors and whether you will pay them directly or through the trustee.
- How much you will pay the trustee and whether the payment will be monthly or bimonthly.
- What secured property, if any, will be surrendered. In order to keep the property, the plan must pay the creditor the present value of the secured property.
- How much unsecured creditors would receive under a Chapter 7 liquidation bankruptcy. The reorganization plan must pay unsecured credits the amount they would have received under Chapter 7.
- How you will pay the arrearages.
- What contracts you want to assume and which ones you want to reject.
- A statement that the plan has been made in good faith.
The plan must reflect a commitment to using all projected disposable income to pay off the creditors during the bankruptcy period. You also must show that your current income is sufficient to pay the trustee for your back debts as well as paying your ongoing secured debts like your mortgage or car loan.
Pay Off Your Debts in Chapter 13 Bankruptcy
Filing a Chapter 13 bankruptcy allows you the opportunity to get caught up on your debt by reorganizing your debt into a manageable repayment schedule. You will get caught up with your debts in a specific time period, anywhere from 3 to 5 years.
Debt consolidation offers are out there for people looking to get out of debt, but the promises made by debt consolidation companies can be false. It’s important to work with a local, reputable lawyer, who is monitored by a federal judge. All Chapter 13 decisions are binding on your creditors, and they can’t come after you for more money in the future.
When you make the decision to control your debt, it’s time to call a bankruptcy law firm that can help you. We understand that your circumstances are different from anyone else’s. That is why Bond & Botes chapter 13 bankruptcy lawyers give every client the personal attention they need and deserve. Make sure you know your rights and are prepared to make the important financial decisions that will give you a fresh start. Your initial consultation at our law offices is FREE.
Our Attorneys Can Help
When you come to meet with an attorney at our practice, you should bring all the financial information that you have. This includes all past due bills, bank accounts, back tax records and more. Your bankruptcy lawyer will have to take a careful look at your finances, and you may be asked to provide a significant amount of documentation in order for a chapter 13 bankruptcy to be filed.
Filing for chapter 13 bankruptcy allows you to take control of your financial future. Sometimes filing for bankruptcy is the best way to a more stable future. Instead of wallowing in paying credit card minimums and taking calls on a daily basis from creditors, it’s time to make a change that will give you a more stable financial foundation for your future.