Chapter 13 Bankruptcy

by webmaster | Nov 21, 2019

PERSONAL REORGANIZATION

Chapter 13 Bankruptcy is referred to as a “reorganization” because it enables individuals to consolidate their debt and reorganize it into an affordable monthly payment plan approved by the court.

does not completely erase a person’s debt, but consolidates the debt and restructures it into a monthly payment that the consumer can afford. At the end of a three to five year repayment period, the remaining balance of the unsecured debt is discharged (eliminated). When the court awards a chapter 13 Bankruptcy filing, the pays for living expenses first, and then any money left over is used to repay creditors, even if it’s just pennies on the dollar. The debtor is thus able to pay off their debts in affordable monthly payments over a period of three to five years, depending on their disposable monthly income, expenses, and assets. Chapter 13 Bankruptcy cases typically last for three to five years from the date of the initial filing to the date the remaining debts are discharged.

Consolidate Late Payments

A Chapter 13 Bankruptcy enables Consumers to consolidate their mortgage arrearages, balances on car loans, student loans, credit card debts and other unsecured debts. All of the debtor’s outstanding debts must be included in the Chapter 13 Bankruptcy consolidation. Many individuals find a Chapter 13 advantageous because they can consolidate student loans and taxes with their other bills and pay them over time, thus stopping collection actions even if some of these obligations cannot be discharged in a Chapter 7The chapter of the Bankruptcy Code providing for "liquidation,"(i.e., the sale of a debtor’s nonexempt property and the distribution of the proceeds to creditors.) Click for more: Chapter 7 Bankruptcy Bankruptcy. A Chapter 13 Bankruptcy will also stop the finance company from repossessing your car. Your past due car payments will be consolidated with the entire balance on your vehicle loan so you can pay it all off over the next three to five years.

Missed Mortgage Payments

Additionally, if your home is currently 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, but your lender cannot foreclose to collect any outstanding mortgage payments. This is because a Chapter 13 filing allows you to consolidate all of your missed mortgage payments or “arrears” and then repay them over 3 to 5 years. For example, if you are $12,000 behind on your mortgage, and your regular house payment is $2,700, then under a Chapter 13 plan your mortgage payment would be your normal $2,700 payment plus approximately $200 ($12,000 ÷ 60 months) to repay the arrears. Consequently, if you are in default, the Federal Court reinstates your mortgage so that the lender cannot foreclose while you are under its protection and making your payment under the court approved plan.

Eliminate Junior Liens

The court also strictly scrutinizes any fees the lender tries to impose on top of your normal mortgage payment. Consequently, a Chapter 13 program may result in a more favorable repayment plan than those offered by lenders through their loan modification programs. In some situations, you can even eliminate the lienThe right to take and hold or sell the property of a debtor as security or payment for a debt or duty. Click for more: Lein Strip from your second and third mortgages. This is known as lien stripping.

Creditor Meeting

About a month after you file for a Chapter 13 reorganization, you will be required to appear before a judge and a court-appointed trusteeThe representative of the bankruptcy estate who exercises statutory powers, principally for the benefit of the unsecured creditors, under the general supervision of the court and the direct supervision of the U.S. trustee or bankruptcy administrator. The trustee is a private individual or corporation appointed in all chapter 7, chapter 12, and chapter 13 cases and some chapter 11 cases. The trustee’s responsibilities include reviewing the debtor’s petition and schedules and bringing actions against creditors or the debtor to recover property of the bankruptcy estate. In chapter 7, the trustee liquidates property of the estate, and makes distributions to creditors. Trustees in chapter 12 and 13 have similar duties to a chapter 7 trustee and the additional responsibilities of overseeing. At this appearance, the trustee and the judge want to make sure that you understand the amount of payments you must make and that you have the ability to pay them. However, while you are in an interest-free Chapter 13 repayment plan, your creditors cannot collect from you. Your creditors are forced to accept the amount allocated to them by the Court.

Contact an Experienced Chapter 13 Bankruptcy Lawyer

If you are facing overwhelming financial troubles, it is crucial that you contact an experienced bankruptcy attorney to help you eliminate this crushing debt.

I wish I have the right words to describe my exceptional experience with Grant Hallstrom and his incredible team. When time comes to count on someone reliable to understand your situation and help you going through challenges, Grant is the best ally. The level of expertise and professionalism reflect the outstanding result from a desperate situation to a life changeing experience. I couldn’t be more grateful for what he did for my family and my business. Very humbly, thank you Grant.

Call now: (949) 450-8500

HALLSTROM KLEIN & WARD LLP

IRVINE, ORANGE COUNTY, CA

(949) 450-8500

Experienced Bankruptcy Attorneys Who Care