What is Chapter 13?
What Is Chapter 13 Bankruptcy?
Compared with other types of bankruptcy and debt relief, Chapter 13 bankruptcy can offer the strongest protections for your home, car and other important possessions. There are few programs that function like Chapter 13, which is designed to stop pending foreclosure and repossession while giving you the means to protect your home and cars for the future.
When you file for bankruptcy under Chapter 13 its built-in tools kick in to stop foreclosure, repossession and other contact from creditors. Then the Chapter 13 plan works with you to create a process to pay off your back debt and secure your property for the future.
So if you are in a situation where you feel Chapter 13 bankruptcy could make a difference, take some time to fill out our Free No Obligation Case Evaluation Form and get answers to your questions from a local bankruptcy attorney
The Chapter 13 Bankruptcy Automatic Stay
The Chapter 13 Automatic Stay: When you file for bankruptcy, the automatic stay typically kicks in. This is a powerful court order that could save your house.
The automatic stay prevents creditors from taking any collection action against you on the debts included in your bankruptcy filing, this includes stopping:
- Foreclosure, even if it’s already begun
- Repossession of cars, boats and other property
- Wage garnishment
- Harassing phone calls and letters
- Lawsuits
So if you’re worried that you may lose your home or car very soon then consider whether filing for bankruptcy could be your best course of action. It may be difficult to get out from under old debts when you’re dealing with the stress and pressure cause by threats of foreclosure. Chapter 13 is designed to provide breathing room. Then, once you’re under its protection and have stopped foreclosure, you may begin to take steps to regain control of your finances through bankruptcy’s other tools.
The Chapter 13 Repayment Plan
The Chapter 13 Repayment Plan: Chapter 13 bankruptcy is designed to freeze, order and typically reduce your debts. The goal here is to make them more manageable. When you file Chapter 13, you and your bankruptcy lawyer will meet with court trustees to work out a repayment plan. This plan may include debt from many sources, including credit cards, home mortgage, car loans, personal loans and even medical and utility bills. Often, debt from credit cards and unsecured bills will be reduced, often significantly. Working with you and realistic expectations based on your income, the plan will be created. Each month you’ll make a payment to the trustee who will then handle your creditors in the court-appointed repayment order.
