Chapter 13, also called “a wage earner plan”, is a way of restructuring a full or partial repayment of your debts according to your ability to repay. We will carefully examine your financial needs to determine an amount you can comfortably afford to pay. An allowance will be given for reasonable rent, groceries, utilities, clothing, car payment and expenses, recreation, insurance, etc. After deducting all of these necessary expenses from your household income, the amount remaining (“net disposable income”) is then committed to a monthly payment Plan, usually a three or five year period (with the first Plan payment due next pay period after filing). The Creditors, under most circumstances, are required to accept the payments as payment in full.
After successful completion of the Plan and after receiving a Certificate upon completion of a “personal financial management course”, the debts are discharged. Creditors and the appointed Chapter 13 Trustee have the right to object to your proposed Plan of reorganization. These objections will have to be addressed and resolved before the Judge will approve the Chapter 13 Plan.
What are the advantages of Chapter 13?
Chapter 13 has a few advantages over Chapter 7. Although you may usually keep your house in Chapter 7, there are some Chapter 7 circumstances where this is not possible. A Chapter 13 will allow you to keep your house and automobiles where this might not be possible in a Chapter 7. A Chapter 13 may prevent creditors from suing co-signers (such as a parent or spouse). A Chapter 13 will allow the payment of past due mortgage payments over a period up to 60 months. A Chapter 13 may allow you under specific circumstances to restructure a delinquent car loan. A Chapter 13 may allow the payment of past due income or property tax liabilities over the life of the Plan with no additional interest or penalties. A Chapter 13 may allow the stripping of second mortgage lien from the Debtor”s residence if the value of the residence is less than the amount of the first mortgage lien.
Speak Directly With An Experienced Lawyer At No Cost To You
Schedule a complimentary consultation with Bankruptcy Attorney Marc P. Feldman to understand how bankruptcy can help you obtain the debt relief you need. Contact us online or call our office at 973-267-7555.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.