Bankruptcy: Chapter 13

Are you trying to save your home from foreclosure? Is the “repo” man looking for your car?
Chapter 13 is for people with income and with assets that they do not wish to lose. Your main attention is to preserving your assets.
Chapter 13 puts an immediate stop to foreclosures and repossessions. It allows you up to five years to catch up the missed mortgage payments or to pay your secured creditors. Most times we are able to reduce the interest that you are paying on your cars and the other creditors, but not your mortgage.
Chapter 13 Bankruptcy — bankruptcy in Columbus, GA
In many cases you can wipe out some or all of your credit card debt as well as any other unsecured creditors. It is a good opportunity to keep home, cars and personal property when you need time to catch up.
Under Chapter 13, you are making payments to a trustee, usually by payroll deduction, who in turn pays the creditors your attorney has proposed under the “Plan”. Your unsecured creditors could receive anywhere from 100 cents on the dollar to 0 cents on the dollar with no interest. It is all based on your income and normal living expenses.

Chapter 13 bankruptcy is a debt repayment plan through which you consolidate your debts and make a payment on your debt over a three- to five-year period. While in a Chapter 13 debt repayment plan, the creditors cannot collect from you, and the creditors are required by a Federal Court order to adhere to the terms of the plan.

Immediately upon filing and your creditors being notified, they must cease all communication with you as the court will issue an automatic stay. This includes foreclosures, repossessions, wage garnishments, harassing bill collection calls and collection letters. You will be protected from these until your case pays out.

One very important thing to remember about Chapter 13 bankruptcy is that you must be working or have a consistent source of income for your repayment plan to be approved by the court. Not only must you be able to pay for your monthly living expenses, but you must also be able to make a payment to the court to consolidate your debts.

Debts that are generally consolidated in a Chapter 13 bankruptcy are mortgage arrears, balances on vehicle loans, credit card debts and other unsecured debts. All outstanding debts must be included in the Chapter 13 bankruptcy consolidation.

Stop Foreclosure Immediately

If your home is presently in foreclosure, a Chapter 13 bankruptcy filing will stop the foreclosure any time prior to the sale and allow you to repay your mortgage arrears through your Chapter 13 bankruptcy. You will still be obligated to make all future mortgage payments directly to the mortgage company, unless you file in Georgia and are four or more payments behind. Then you are required to make your future payments through the trustee's office. The mortgage company may not foreclose to collect any outstanding mortgage payments without getting the court's consent.

Save Your Car

If the “repo” man is looking for your car, a Chapter 13 bankruptcy will also stop the finance company from repossessing your car. The past-due payments and the entire balance on your vehicle loan will be consolidated, which you will pay off over the next three to five years. The vehicle finance company can no longer repossess your car, and you will no longer have to make a payment directly to the finance company. Under certain circumstances we may even recover your vehicle after repossession and consolidate the remaining balance, but not if repossessed in Alabama.

Protect Cosigners

Your cosigners receive the same protection that you receive under Chapter 13 bankruptcy. Through a Chapter 13 bankruptcy, we will protect your cosigners from collection activity, and the creditors must wait to be paid. So, if your friend or relative cosigned on your vehicle, and you are having trouble affording the payments, we can put your remaining balance inside a Chapter 13 bankruptcy.

Beware of Refinancing

If you have equity in your home, you can file a Chapter 13 bankruptcy, protect your equity and repay your mortgage arrears over as long as five years. Refinancing or taking out a second mortgage may just create an additional mortgage payment that you cannot afford, instead of repaying your mortgage arrears through a Chapter 13 bankruptcy.