Chapter 13 is a difficult type of case states Forest View bankruptcy attorney. Chapter 13 is bankruptcy that is a repayment plan or a reorganization of your debt to make a payment plan towards paying off a certain amount of your debt for a period of 3 to 5 years. So Chapter 13 is really a consolidation plan that is backed by the federal government. This is federal government’s consolidation.
Chapter 13 is a bankruptcy that’s very helpful for those people who are in need of specifically saving their home, saving a car or someone who has a lot of debts but has the means to pay back a portion of their debt. Bankruptcy Chapter 13 pretty much is a plan that is put into effect for 36 to 60 months and each month the client or the debtor has to make a one-time payment to what is called the trustee every month and the trustee will make a disbursement to their creditors on behalf of the debtor.
The other important thing to note is that Chapter 13 bankruptcy still gives the same protection of a Chapter 7 bankruptcy in the sense of what is called is the automatic stay. The automatic stay pretty much gives you the protection from creditors who are harassing you, calling you for the debts, sending you letters, possibly suing you or garnishing you. All of these collection efforts that a creditor will try to do is going to be stopped by a Chapter 13 bankruptcy. If a creditor persists in collection efforts after the case is filed, notify your Chapter 13 bankruptcy lawyer for help in getting it stopped.
The other thing I want to get back to is that Chapter 13 is a great way to save a home. Unfortunately, in today’s economy, there are a lot of people struggling with mortgage payments. Chapter 13 is a great way to catch up on your mortgage payments and this is how. What happens in a Chapter 13 is that debts of any mortgage arrears will be lumped in to the Chapter 13 repayment plan for 3 to 5 years. So if we filed a Chapter 13 case today, we would be able to take any monthly mortgage payments that we missed and put those payments into the Chapter 13 plan and pay those mortgage deficiencies for 3 to 5 years. If you fail to make the necessary payments, the case can be dismissed on motion of the trustee. At that point, you have other bankruptcy options. One such option would be to refile another Chapter 13 case.