If you are behind in your home or other secured property payments and worry you may be facing foreclosure, Chapter 13 bankruptcy may be your financial solution. Chapter 13 involves a court-approved repayment plan allowing you time to catch up on your arrears without losing your home or other assets.
You must have a reliable source of income to file Chapter 13 to make the payments. By law, your repayment plan can not last longer than five years. Your creditors will not be able to make collection attempts as long as you are sticking to your plan. At the end of your repayment period, any unsecured debt remaining will be eliminated.
Speaking to a qualified bankruptcy attorney will get you the benefit of experience and knowledge of the bankruptcy law. You want to take advantage of every exemption and counsel, ensuring that you will get the best advice for your situation.
You and your attorney will go over your income and expenses. Verifying you have a source of income to qualify for Chapter 13 bankruptcy.
Two Credit Courses
You will have to attend two credit counseling courses before your case can be discharged. Before you file your papers with the court, you will need to attend an approved credit counseling course. The counselor will go over your options for getting out of debt. The second course will be the pre-discharge debtor education course to teach you how to manage your finances in the future to avoid bankruptcy again. You can find a list of approved counselors at the U.S. Justice Department website (www.usdoj.gov).
Filing Your Papers
Next, you or your lawyer will submit your bankruptcy paperwork to the bankruptcy court in your area. When you file your papers, an automatic stay will go into effect, preventing your creditors from taking any further action to collect on your debt.
Meeting of the Creditors
Approximately a month after you file your petition with the court, you, your attorney, and your spouse, if filing jointly, will attend a meeting of the creditors. You will be assigned a trustee who will ask you questions regarding your papers. The trustee must conclude that you are likely to make the payments and the plan is a good faith effort to repay your creditors.
The bankruptcy judge will approve the plan if all of the court costs have been paid and if your plan complies with the law.
Within thirty days of filing your bankruptcy paperwork, you will start making plan payments to the trustee. The trustee will distribute the money to your creditors. The plan will be structured over a three or five year time period. You will need to continue making your mortgage and vehicle payments if you wish to keep these assets.
When your plan is approved, and you have made all of the plans payments, the court will eliminate any remaining qualifying debt.
If you are worried about losing your home, contact a McAllen bankruptcy attorney today to find out what options you may have.