Legal Advice During Challenging Times

Guiding You Through Chapter 13 Bankruptcy

Chapter 13 bankruptcy generally protects you from foreclosure and auto repossession. The debtor must disclose on the bankruptcy petition all assets and liabilities, including income and expenses. As with Chapter 7 bankruptcy, immediately upon the filing of a Chapter 13 bankruptcy case, absolutely no creditor may continue its collection efforts against the debtor. This means that upon the filing, all actions against you are “stayed.”

Generally, an individual would consider filing for Chapter 13 bankruptcy protection to save his or her personal property such as an automobile that is in jeopardy of repossession or a house that is in jeopardy of being lost in foreclosure. The Law Offices of Franklin S. Montero in Clifton, New Jersey, understands bankruptcy law, and our attorneys can help.

When Filing For Bankruptcy

One may file for Chapter 13 bankruptcy if the individual is unable to meet the requirements of Chapter 7 bankruptcy. Under this scenario, the individual would be required to pay only a portion of their debt to the creditors in a Chapter 13 bankruptcy because they are unable to eliminate all debt in Chapter 7 bankruptcy.

Furthermore, a debtor may file for Chapter 13 bankruptcy for the purpose of paying off debt that is not dischargeable under Chapter 7 bankruptcy. The filing may provide a number of benefits such as saving your house and cramming down mortgages and other secured loans.

Factors Determining Your Payments

Chapter 13 bankruptcy requires a debtor to make monthly payments to a trustee (a person that administers the case). The monthly bankruptcy trustee payments may last 36 to 60 months. The amount of the monthly payment and the number of months of the payments are based on factors including, but not limited to:

  • Amount of arrears on the mortgage and/or auto finance payments
  • Value of assets
  • Amount of debt
  • Income and expenses before and after the filing

Each month, the trustee disburses your payments to certain creditors in compliance with the plan. Our attorneys will represent you from start to finish.

Making Trustee Payments

Typically, if an individual is keeping their house, in addition to their monthly trustee payments, the person is required to pay their monthly mortgage payments directly to the mortgage company. If an individual is keeping a financed auto, they are required to continue paying the financing in some fashion.

However, one might be able to discharge unsecured debt such as credit card and personal debt. If the court requires you pay any portion of the unsecured debt, the payment will be made through the monthly trustee payment. Upon completion of all payments, the debtor receives an order discharging all unsecured debt, whether or not the unsecured creditors were paid any funds.

If one’s house is in foreclosure, a Chapter 13 bankruptcy stops the foreclosure action and allows the person to save the house by paying all mortgage arrears through the monthly trustee payments over the life of the payment plan. At the completion of all trustee payments, the mortgage should be brought current.

Contact A Skilled Attorney

If you need advice regarding debt relief, The Law Offices of Franklin S. Montero in Clifton, New Jersey, is prepared to help. Our attorneys understand bankruptcy law and can help you when filing for Chapter 13 bankruptcy. Please set up a meeting by filling out this online form or calling 973-869-5556 . Se habla español.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.