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Chapter 13 is an interest-free debt repayment plan through which you consolidate your debts and make a payment on your debt over a 3 to 5 year period. While in a chapter 13 debt repayment plan, the creditors cannot collect from you, and the creditors are required by a Federal Court order to adhere to the terms of the plan.
One very important thing to remember about Chapter 13 bankruptcy is that you must be working or have a consistent source of income for your repayment plan to be approved by the court. Not only must you be able to pay for your monthly living expenses, but you must also be able to make a payment to the court to consolidate your debts.
Debts that are generally consolidated in a chapter 13 are mortgage arrears, balances on vehicle loans, student loans, credit card debts and other unsecured debts. All outstanding debts must be included in the Chapter 13 consolidation.
Read below to find out more detailed information about the benefits of Chapter 13:
If your home is presently in foreclosure, a Chapter 13 bankruptcy filing will stop the foreclosure any time prior to the sale, and allow you to repay your mortgage arrears through your Chapter 13. You will still be obligated to make all future mortgage payments directly to the mortgage company, but they may not foreclose to collect any outstanding mortgage payments.
If the "repo" man is looking for your car, a Chapter 13 bankruptcy will also stop the finance company from repossessing your car. The past due payments and the entire balance on your vehicle loan will be consolidated into the Chapter 13, which you will pay off over the next three to five years. The vehicle finance company can no longer repossess your car, and you will no longer have to make a payment directly to the finance company. Only one payment is made, and that is to the Chapter 13 trustee. Under certain circumstances we can even recover your vehicle after repossession and consolidate the remaining balance.
Although you may not eliminate student loans in a Chapter 7 bankruptcy, you can consolidate them, with your other bills, in a Chapter 13 and stop collection action against you. Krieger & Associates will stop the collection action and garnishments related to student loan debts and consolidate your bills so that you may repay them in a plan that is feasible for you.
Your cosigners receive the same protection that you receive under Chapter 13. Through a Chapter 13, we will protect your cosigners from collection activity, and the creditors must wait to be paid through the Chapter 13. So, if you friend or relative cosigned on your vehicle, and you are having trouble affording the payments, we can put your remaining balance inside a Chapter 13.
If you have equity in your home, you can file a Chapter 13 bankruptcy, protect your equity, and repay your mortgage arrears over as long as three years. Refinancing or taking out a second mortgage may just create an additional mortgage payment that you cannot afford, instead of repaying your mortgage arrears through a Chapter 13.
Why eat up your equity with another mortgage? You should explore all of your options, and make sure you contact us along the way so we may advise you of your legal rights. When you have quality legal representation, you become knowledgeable about your rights, and become less vulnerable to people trying to take advantage of you in a time of distress. Please remember that we offer a free consultation. Explore Chapter 13 bankruptcy as an alternative to a high-interest rate equity loan against your home.
Under Chapter 13 the new law's impact is just as severe. Currently under Chapter 13, Krieger & Associates can prevent foreclosures and repossessions by consolidating your outstanding mortgage arrears and car note allowing you to repay these debts over three to five years, while under the courts protection. The new law would pay credit cards and medical bills ahead of your mortgage arrears and car note, therefore increasing Chapter 13 consolidation payments, making it easier for the banks to foreclose on your home or repossess your vehicle, and keeping honest debtors in bankruptcy for five to seven years. You may no longer be able to prevent a foreclosure or repossession after the law change. Act now, before it's too late. Call us to speak with an attorney about how the law change could affect you.
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