Chapter 13 Bankruptcy

CHAPTER 13 is the other form of bankruptcy available to individuals.  It involves making monthly payments to a trustee generally for 36 or 60 months (based on a plan).
 
WHY WOULD I WANT TO FILE A CHAPTER 13
Some reasons include:
-You do not qualify for a Chapter 7.
-You wish to pay past due mortgage payments or modify mortgage terms to save your home from foreclosure.
-You wish to change the terms of your vehicle loan.
-You wish to pay recent tax debt over time.
-You wish to discharge debts that can not be discharged in a Chapter 7.
 
HOW TO START A CHAPTER 13
It is started with filing a petition and other documents like a Chaper 7, but a proposed Chapter 13 plan is also filed.  Like a Chapter 7, a credit counseling course must be completed before filing.
 
HOW LONG AM I REQUIRED TO BE IN A CHAPTER 13 IN ORDER TO GET MY DEBTS DISCHARGED?
If you have below median income based on your family size, you qualify for a 36 month plan.  If your income is above median income, your plan will be 60 months.
 
CAN I GET OUT OF A CHAPTER 13?
You can dismiss the Chapter 13 anytime. 
 
CONFIMATION OF PLAN
Your Chapter 13 plan must be approved by a judge.
Your attorney is primarily involved in the approval process, and will attend any court hearing on your behalf.
 
TAXES
Taxes incurred during a Chapter 13 must be paid in full.  Any net tax refunds received during the Chapter 13 must be paid over to the trustee for payment on the plan.
 
CAN I FILE A CHAPTER 13 IF I FILED A BANKRUPCY A FEW YEARS AGO?
You can file a Chpter 13 if more than four years have elapsed  since you filed a Chaper 7 in which you received a discharge of your debts. 
 
ANY EXCEPTION?
Yes. Your can file a Chapter 13 at anytime if you plan to pay your unsecurd debts (such as credit cards) in full or if you plan to pay past due mortgage payments in full.
 
HOW MUCH WILL MY PLAN PAYMENTS BE?
The amount paid each month to the trustee depends on your budget (income less expenses) and the nature and amount of your debts.
 
CAN I KEEP MY CAR?
Yes.  But if you have equity in the car (equity equals the value of the car less the amount of any car loan) that exceeds your exemption for the car, the non-exempt equity must be paid into the plan.  See "Exempt Property" under "Questions and Answers".
 
WHAT ABOUT MY CAR LOAN PAYMENT?
Your car loan payments will be paid in the Chapter 13 plan by the trustee.  You may be able to change the interest rate of the car loan in the plan.  Also, you may be able to decrease the amount of the car loan to the retail value of the car.
 
 
 
 
 
 
 

 

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