Chapter 13 Bankruptcy
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.
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.
Contact us today by calling (949) 450-8500 for your FREE consultation.
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