In a Chapter 13 case you file a “plan” showing how you will pay off some of your past due and current debts over three to five years. The most important thing about a Chapter 13 case is that it will allow you to keep valuable property — especially your home or car if you are behind on payments — which might otherwise be lost, so long as you complete the required payments.
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Your Chapter 13 plan payments will be at least enough to pay your past due mortgage and car payments (if you wish to keep those assets), a percentage of your unsecured debt based on your disposable income which we go over in great detail with you, and the trustee commission of about 10% of all plan payments.
You must also make all future mortgage and car payments, in addition to the plan payments, if you wish to keep the property or car.
The most important thing about a Chapter 13 case is that it will allow you to keep valuable assets which have too high a value to be ordinarily protected, so long as you complete the required payments.
You should consider filing a Chapter 13 plan if you:
- Are behind on your mortgage payments and the lender will not work with you;
- Have a second or third mortgage on your single family home and the property’s value is less than the first mortgage ( we might be able to get rid of the inferior mortgage!);
- Have rental property (including a multi family residence) and the property’s value is less than any mortgage;
- Have valuable property which is not exempt, but you can afford to pay its value to your creditors over time;
- Have certain debts that will not be discharged in a Chapter 7 bankruptcy, such as a marital property division;
- Have excessive disposable income, which generally means that you are saving hundreds of dollars each month or spending your money unreasonably; or
- Have disposable income above the IRS collection standards (which we calculate for you in great detail).
You will need to have enough income in Chapter 13 to pay for your necessities and to keep up with the required payments as they come due.
Confused? Don’t worry one of the reasons you need to hire an experienced bankruptcy lawyer for your case is to be sure that you choose the right type of bankruptcy for your situation. All you need to do is contact me for a consultation to talk about your problems and whether bankruptcy is right for you.
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