CHAPTER 13 BANKRUPTCY BASICS
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 3 to 5 year period. During this time you will 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 any remaining balance to unsecured creditors will be wiped out. 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. We would then need to subtract your expenses from your income. This includes all of your expenses such as food, rent or mortgage, vehicle payments, utilities, prescription drugs, car repairs, home maintenance or medical expenses. We consider expenses you may not currently be spending on but it would be reasonable to do so such as health insurance, life insurance, or a retirement account. If you have expenses not mentioned here we can count them so long as it is reasonable and necessary. The difference between your present income and reasonable expenses is your disposable income.
WE WILL BE THERE FOR YOU
At your court hearing the trustee will evaluate the reasonableness of your expenses. Our job as your attorney is to protect the money that is necessary for you to take care of yourself and family.
HOW MUCH WILL MY CHAPTER 13 PAYMENT BE?
Your plan payment must will pay your mortgage arrearage over the next three years, your current mortgage payment (the 13 office would make your regular mortgage payment through the case), your vehicle payment and a some amount for your unsecured creditors.
Every situation is unique. We offer a free consultation with one of our attorneys to discuss your situation. Your attorney will give you an approximate amount of your Chapter 13 payment.