In a chapter 13 bankruptcy, a debtor proposes a repayment plan to creditors. The repayment plan is typically between 36 and 60 months, depending on the debtor’s income and the amount of debt. The payment is made monthly to the Chapter 13 Trustee, and can be automatically deducted from your paycheck or bank account. You can file Chapter 13 bankruptcy to prevent a home foreclosure; make up missed car or mortgage payments; pay back taxes; stop interest from accruing on your tax debt; keep valuable non-exempt property; and more. If you can stick to the terms of your repayment agreement, all your remaining dischargeable debt will be discharged at the end of the plan.
The amount to be repaid is determined by several factors, including your disposable income. In addition, the total amount paid to creditors under the Chapter 13 plan must be at least as much as creditors would receive if you filed a Texas Chapter 7 bankruptcy. To file Chapter 13 bankruptcy you must have a regular source of income, and your payment plan must be enough to pay for at least the amount you are behind on your vehicle or home.
Oftentimes, a bankruptcy lawyer can lower your payments on things like your vehicle by paying for them in the Chapter 13 plan. In the Chapter 13 plan, you have the ability lower your payment on the vehicle by only paying the value of the vehicle, and by possibly lowering the interest rate. In some Courts, the judge might require you to make your home mortgage payments through the plan if you are currently behind on your payments. This means that you will have fewer payments to keep up with, and you will be able to keep current on your home going forward.
The most important thing about a chapter 13 case is that if you can make the payments which the bankruptcy law requires to be made to your creditors, you can keep valuable property, like your home and car, which might otherwise be lost.
Contact Brandy Austin Law
If you are facing a financial crisis that was caused by a temporary loss of income, health problems, or any of the other many reasons why someone might fall behind on their payments, you do have options. If you are facing foreclosure or repossession, please contact us so that we can help you get through these financial troubles.