Chapter 13 Bankruptcy

Chapter 13 bankruptcy is also known as a repayment bankruptcy or a reorganization bankruptcy in which some or all of your debt is repaid through the Chapter 13 Bankruptcy repayment plan. The most common situation for a Chapter 13 is when an individual is behind on their mortgage, facing foreclosure, and they wish to keep the house and become current on their mortgage payment. A Chapter 13 bankruptcy can also help to keep an automobile from being repossessed and it is also used for individuals who make more money than allowed to file for a Chapter 7 total liquidation of their debts.

Chapter 13 bankruptcy will stop the foreclosure proceedings and allow you to keep your home. It will also stop a sheriff sale so long as the bankruptcy is filed before the actual date of the sale. Chapter 13 bankruptcy will allow you to file a three-year or a five-year reorganization payment plan to catch up on your mortgage arrears. You are required to resume regular monthly mortgage payments directly to your mortgage company once the case is filed and also make a catch-up payment to the court to become current on your mortgage arrears. If you make all of your payments, at the end of the three or a five year repayment plan, you are current on your mortgage. The mortgage company is required to accept the payments and cannot continue with the foreclosure while you are going through this process, so long as you make all of your payments on time.

As soon as the bankruptcy is filed, you are under the protection of the Automatic Stay of Proceedings which protects you from all collection activity including foreclosure. Filing for bankruptcy will stop the harassing phone calls and at the end of the repayment period, any remaining unsecured debt, such as credit cards, unsecured personal loans, medical bills, etc. will be wiped out by the Bankruptcy court.

If you are facing foreclosure of your home, call the experienced attorneys at Ellis B. Klein & Associates and we will gladly give you a free consultation and let you know how we can help you to save your home. We have helped thousands of people save their homes and wipe out their debt over the past 20+ years in practice. Call now for a free consultation.

Chapter 13 bankruptcy will also help individuals keep their vehicles from being repossessed and sold at auction. If you are behind on your car payment and facing a repossession, filing for Chapter 13 bankruptcy automatically stops repossession proceedings and will enable you to catch up on your car payment over a three or five year period. Additionally, if your vehicle was recently repossessed, filing for Bankruptcy before the car is sold at auction will allow you to regain possession of the car. You will be required to maintain regular monthly car payments directly to your lender and you will also make a catch-up payment to the bankruptcy court to catch up on your arrears to the car company. Another alternative is to put the entire loan into the Chapter 13 repayment plan in which you would be making one payment to the bankruptcy court to become current. If you owe more on the vehicle than what it’s worth, you may also be able to do a “Cramdown” in which you only have to pay the value of the car plus interest through the bankruptcy repayment plan.

In addition to keeping your vehicle, any unsecured debt that you may have such as credit cards, medical bills and other debt will be wiped out by the court at the end of the repayment plan.

As soon as you file for Chapter 13 bankruptcy you are protected under the Automatic Stay of Proceedings which prohibits a lender from repossessing your vehicle. Filing for Chapter 13 bankruptcy will also immediately stop harassing phone calls from your creditors, any pending lawsuits and wage garnishments. If you are facing repossession, call the experienced attorneys at Ellis B. Klein & Associates for a free consultation. Over the past 20 years in practice we have helped thousands of people keep their vehicles and reorganize their debt to get fresh start.

Chapter 13 bankruptcy can also be used to repay all or a portion of your unsecured debt over a three or five year period. This situation usually arises when a client “fails” the means test which shows that they have some disposable income left over each month to repay at least a portion of their debt to the court. Depending on how much money is left over at the end of the month according to the means test, an individual is required to pay that amount over three or five years and once all the payments are completed, any remaining debt is discharged (wiped out) by the Bankruptcy court. Filing for Chapter 13 bankruptcy will immediately stop all types of harassment from your creditors including phone calls, lawsuits, and garnishments. Call the experienced attorneys at Ellis B. Klein & Associates for a free consultation and we can advise how we can help you stop the harassment and give you a fresh financial start.

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