Chapter 13 Bankruptcy is often called debt consolidation bankruptcy. It is the best option for those that want to keep their property such as homes and vehicles. Overall, Chapter 13 is a restructuring of consumer debt to affordable payments. Chapter 13 may be the best option for those with a regular income too high for Chapter 7. It may be appropriate for those with a property that does not qualify for bankruptcy protection (non-exempt), and those who want to keep their property without surrendering it to the bankruptcy trustee. Also, payments may be reduced to as little as zero percent on unsecured debts such as credit cards and medical bills.
Chapter 13 repayment plans are 3-5 year plans. Depending on your individual situation, there are various home mortgage options available. If your home is valued less than what is owed, you have more than one mortgage or a home equity line of credit you may reduce your mortgage payments to a more affordable rate. Also, it may be possible to eliminate a second mortgage or home equity line of credit. These potentially could be reduced to a general unsecured claim status qualifying them as dischargeable like credit cards and medical debt.
Additionally, it is possible to reduce automobile payments to the actual value depending on how long you have owned the vehicle. Other secured loans may be eligible as well. The only secured loan you cannot modify in this manner is the first mortgage loan on your principal residence.
Once a bankruptcy Petition is filed, an automatic stay is immediately in effect. The automatic stay protects your property. Creditors must stop any attempts to collect, cease harassing phone calls, stop legal proceedings including foreclosures, repossessions, and garnishments.
Stop creditor harassment and live debt free. Call today for a free consultation to determine whether or not a Chapter 13 bankruptcy is right for you.
