Chapter 13 bankruptcy is a powerful legal tool that can help you save your house, catch up on missed payments, and eliminate unsecured debts like credit card debt. Chapter 13 bankruptcy creates a repayment plan that lasts three to five years, depending on your specific situation.
Understanding Your Chapter 13 Repayment Plan
When you file for Chapter 13 bankruptcy you will also file a proposed repayment plan. It lays out what debts will be paid back in the plan, to which creditors, and what your proposed monthly plan payment amount will be. Chapter 13 bankruptcy plans must be approved by the Bankruptcy Trustee and the Bankruptcy Court.
Monthly Plan Payment
Your monthly play payment amount is based on your monthly disposable income. Each Chapter 13 plan is case specific, so without sitting down and fully reviewing your situation, we cannot predict what your monthly plan payment amount would be.
Each month you would make a payment to the Bankruptcy Trustee assigned to your case, then he or she will distribute those payments to your creditors being paid in the plan. The plan will pay back either all or a portion of your debts over the life of the plan. Some debts must be paid 100%, while other debts, such as credit card debts, may be partially paid back or not paid back at all.
We understand this may sound confusing. We’ve filed thousands of Chapter 13 cases. When you hire us, you are in our experienced and capable hands. Our law office offers free consultations so that you can make an informed decision on whether or not bankruptcy is the right choice for you.
Monthly Payments Paid Outside of the Plan
You monthly plan payment will not cover all of your bills. It only covers creditors who are listed as being paid in the plan. There are a number of monthly bills that are typically paid outside of the repayment plan. These bills you will still need to pay monthly, even while you’re in bankruptcy. Bills often paid outside of the plan include your currently due monthly mortgage payment or rent, certain secured loans, utilities, water bill, regular monthly bills like your phone bill, and living expenses like buying groceries.
It is critical that you understand which creditors are and are not being paid through your Chapter 13 repayment plan.
Catch Up on Mortgage Arrears or Missed Car Payments
The plan creates an opportunity for you too, over time, catch up on missed mortgage payments (mortgage arrears). Similarly, it creates an opportunity to pay back missed car payments.
As soon as the bankruptcy case is filed, creditors cannot take collection actions against you. This means that pending foreclosures or car repossessions are stopped. Chapter 13 bankruptcy allows you to save your house or your car.
Filing for Chapter 13 Bankruptcy
It is our mission to ensure that you understand the power and benefits of Chapter 13 bankruptcy. We’re here to answer all of your questions. Call us right now (912) 351-9000 to schedule a free consultation.
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We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code.