Chapter 13 is a great tool for a Dixmoor bankruptcy attorney who would like to save homes. What’s great about Chapter 13 is not only does it stop any foreclosure, but it will stop any kind of collection efforts and put you back to square one with your mortgage company. Putting you back to square one meaning that you no longer are in default in the mortgage company’s eyes. So what it essentially does is it stops foreclosure and then it allows you to catch up on your mortgage arrears and makes you current with your regular mortgage payments. So Chapter 13 is a great tool to stop and save someone’s home. It’s also a great tool to do other things; if you have junior mortgages or equity lines of credit that are connected to your property.
Another great thing for Chapter 13 is when you qualify for a Chapter 13 and you are in a Chapter 13 bankruptcy, your unsecured creditors will get paid hopefully at a lower rate than the full amounts. I say hopefully because sometimes a debtor will qualify for Chapter 13 however, the debtor cannot qualify for the bankruptcy Chapter 13 without having 100% payment plan for the unsecured creditors.
Unsecured creditors are your credit cards, your medical bills, your payday loans, your utilities; these are all things that would be paid back at the lowest percentage or as low a percentage on the dollar as we can. Once again, sometimes it’s 100%; sometimes it could be 10%. So it really depends on your situation and it is a case-by-case scenario for Chapter 13 petitioners.
Also, if for instance you do receive a plan that is 10% of a payback to your unsecured creditors, if you complete that plan, the percentage that you do not payback, that other 90% is discharged in bankruptcy. In an individual bankruptcy case, the discharge is what you want. Discharge is a term meaning that you are no longer personally liable for the debt that was incurred. So personal liability means that you are no longer able to be sued by creditors, they can’t call you, it’s as if you have paid back the debt and it’s as good as gone. So the discharge what you want and the discharge is what eliminates the debt for you. So after a successful completion of a Chapter 13 case, you would pay back your secured creditors in 3 to 5 years. You would pay back a portion of your unsecured creditors, possibly a portion of your unsecured creditors in 3 to 5 years and then the portion that is not paid back would be discharged and eliminated.
And the other good thing to know about this Chapter 13 is that it is a plan that is non-negotiable with creditors. Creditors can argue and fight, however the negotiating power is with you as the debtor. That is the difference between Chapter 13 and a debt consolidation company is that a debt consolidation company does not have the power to negotiate with the creditors. Most creditors want their money paid back in full. In this circumstance, if you are an unsecured creditor and the judge rules that your Chapter 13 plan will be a 10% pay back to them, there is no option for them to opt out of the Chapter 13. They will get paid back at 10% after completion of the plan.
So Chapter 13 is a great tool for saving people’s homes and saving other properties as well. And it’s a great tool to reorganize your debt and pay back a portion of your creditors, hopefully a portion of your creditors and discharge the rest of your debt and receive a discharge and start fresh. There are definitely some advantages when you file Chapter 13 bankruptcy.