Understanding Chapter 13 Bankruptcy
Chapter 13 bankruptcy, also called reorganization bankruptcy, is a plan that consolidates your debts and formulates a payment plan. This payment plan is used to make monthly payments to a court appointed trustee. The trustee then divides up that payment to your qualified lenders. Payments are made monthly for five years, and any unsecured debt that is remaining after the five year period is discharged.
Chapter 13 bankruptcy can be more ideal than a Chapter 7 bankruptcy. It is ideal for people who cannot afford their debts right now, but think they will be able to repay them over time. Working with an experienced lawyer can help you find the debt relief you need to regain financial stability. I am Arlene Gray, Attorney at Law, and I have over 15 years of experience representing clients throughout Bardstown, Kentucky, and the surrounding communities in bankruptcy matters.
Schedule your free initial consultation by contacting me online or by calling 270-505-4243.
Responsibilities of Filing Chapter 13 Bankruptcy
Chapter 13 bankruptcy has many benefits but also carries major responsibilities. When I meet with clients, I review with them the requirements of Chapter 13 bankruptcy very carefully. Although you are not required to make payments as soon as your petition is filed, you will owe those payments at the confirmation hearing. For some clients, this can be tough.
For example, you are expected to pay all your house payments from the date you filed your petition until your confirmation hearing. These payments do not need to be made monthly, but if your confirmation hearing is three months after your filing date, you will be expected to write a check for three months worth of house payments at your confirmation hearing.
Understanding the Expectations of a Chapter 13 Bankruptcy Plan
Without saving money and managing your finances well, this can be difficult. When I meet with clients, I help them understand all the expectations and challenges of filing Chapter 13 bankruptcy. These include:
- Having the funds available to make your house payments at the confirmation hearing.
- Paying your trustee the monthly payment amount. If you miss a payment, the trustee will dismiss your case, and you will no longer be protected by the bankruptcy laws.
- Maintaining your current mortgage payments and interest rates. Filing Chapter 13 bankruptcy to keep your home does not mean your home will be refinanced.
This may seem like a lot of information, but it is important to understand all the requirements of Chapter 13 bankruptcy before filing. I will review your finances and provide a means test during our free initial consultation.
I work closely with you to help you understand all of the options available and make sure you have the information you need to make informed decisions about your situation. Contact me online or call 270-505-4243 to schedule your free initial consultation with an experienced lawyer.
We are a federally designated debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.