THE
WAGE EARNER PAYMENT PLAN
The
primary goal of a Chapter 13 Bankruptcy is
to consolidate your debts and set up a
manageable monthly payment. Chapter 13
bankruptcies are often referred to as a
"Debt Consolidation," or the "Wage Earners
Plan."
-
A
Chapter 13 Bankruptcy may be the more
appropriate type of bankruptcy to file
to:
-
Stop
Foreclosures and Repossessions
-
Situations where the debtor is behind
and wishes to catch up on home mortgage
payments and/or car loans.
-
Restructure/Lower Payments on Certain
Non-Dischargeable Debts
Payment
of non-dischargeable taxes
If you have
filed a Chapter 13 bankruptcy in the last 8
years.
Debtors
can restructure their payments for car loans
(if the loan originated least 2 1/2 years
ago), child support arrears, postpone
student loans, pay delinquent taxes and
certain other non-dischargeable debts. You
can also wipe out as much unsecured debt as
possible (in some cases, over 90%) where the
debtor is not eligible for
Chapter 7
bankruptcy under the new bankruptcy law.
In a
Chapter 13, a debtor must repay a portion of
the delinquent unsecured debts over time in
exchange for a discharge of any remaining
unpaid debt at the conclusion of the
repayment plan. Other Important
Characteristics of a Chapter 13 Bankruptcy
Include:
Chapter
13 Payment Plan
In a
Chapter 13 bankruptcy, you are required to
make monthly payments to a trustee for up to
60 months. The first payment is due 30 days
from the date your case is filed. Depending
upon the type of debts you are including in
the chapter 13 plan, you may be making
payments for little as 36 months at which
time you would have completed all obligated
payments in your Chapter 13 bankruptcy and
your case will be completed. The amount,
length of time, and structure of these
payments is complicated and depends
primarily upon the type(s) of your debts,
your monthly income, and your monthly
expenses. During a consultation with our
office, we will advise you of all the
details of your Chapter 13 payment plan if
you so choose to file.
Keeping
non- exempt property
As with
filing a
chapter 7 Bankruptcy, unless you
have assets of significant of value and/or
with significant equity, most people keep
all of their property in a Chapter 13
Bankruptcy. If you own a home with no more
than about $ 60,000 ( $90,000 if “elderly”)
of equity, have furniture and household
goods of average value and are willing to
keep up your car payment(s), you will most
likely keep all of your personal property.
If may also be able to keep non-exempt
property by paying its fair market value
into your Chapter 13 plan.
Automatic Stay
As with
filing a Chapter 13 bankruptcy, after you
sign the Chapter 13 Petition, Payment Plan
and schedules prepared for you by us, we
will electronically file all documents with
the Clerk of the United States Bankruptcy
Court. Immediately upon filing, a protection
Order is entered by the Court to protect you
from all creditor action. The Bankruptcy
Court orders all creditors to stop all
harassing phone calls, lawsuits, threats,
judgments, repossessions, and garnishments.
This protection order is known as the
"Automatic Stay".
How
Chapter 13 Affects Homeowners Behind in
Their Mortgage Payments
A Chapter
13 is often preferable for homeowners who
are in arrears on their house payments and
are facing a foreclosure. Under Chapter 13,
the debtor has up to 60 months to cure an
arrearage so long as the current mortgage
payments are being made. Also, the debtor
may have an opportunity to market and sell
the residence rather than lose the homestead
equity in the house to a foreclosure. If
your house is in foreclosure your Chapter 13
bankruptcy must be filed, prior to the sale
date in order to restructure the late
mortgage payments.
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