WHAT IS CHAPTER 13 BANKRUPTCY
Chapter 13 is designed for people who are behind on their mortgage payments who would like to save their home or their income is too high to qualify for Chapter 7. Chapter 13 involves paying your disposable income to creditors over a three to five year period. During this time you will be able to make up any missed mortgage or vehicle payments. Your unsecured creditors will be paid a percentage of what you owe them, once you complete your case and receive your discharge the remaining balance will be deemed discharged through the case. This means that creditors will not be able to collect on these debts in any way or form. They will not be allowed to contact you by phone, mail or any other means.
WHAT IS DISPOSABLE INCOME?
To determine your disposable income we will need to know your income for the last six months. If you have had a pay cut or loss of overtime hours we can reduce your current income for these situations, same if you are making more money at the time we would have to increase your current income. We would then need to subtract your expenses from your income. This includes all of your expenses required to take care of your family such as food, rent or mortgage,vehicle payments, utilities and other such needs. Then we consider things that you know you will be spending such as car repairs, home maintenance or medical expenses. Then we need to look at things you may not be spending money on but it would be in your best interest to do so such as health insurance, life insurance or maybe a retirement savings account. If you have expenses not mentioned that doesn’t mean we can’t count it as long as it is reasonable and necessary. Once all of these expenses are counted they get deducted from your income and the remainder is an idea of your disposable income.
WE WILL BE THERE FOR YOU
It is not a good idea to try to file a Chapter 13 on your own at your court hearing the trustee will evaluate the reasonableness of your expenses and will try to cut them down so that there is extra money to pay your creditors. Our job as your attorney is to protect the money that is necessary for you to take care of yourself and your family. This is why we sit down with you and go over your unique situation and expenses with you thoroughly before the case is filed.
HOW MUCH WILL MY CHAPTER 13 PAYMENT BE?
Your Chapter 13 payments must be enough to cover certain required payments. Your plan payment must be enough to pay for your mortgage arrears over the next five years, your current mortgage payment (as the 13 office would make your regular mortgage payment through the case), if you have a vehicle payment this will be included and a small amount for your unsecured creditors.
Every situation is unique. We offer a free consultation where you will be able to sit down with one of our attorney and discuss your situation. The attorney will be able to give you an approximate amount of what your Chapter 13 payment would be at this free consultation. They would also quote you a fee.