Chapter 13 Bankruptcy Cases
Repaying Your Debts Over Time
If you can't catch up on your debts, Chapter 13 bankruptcy may offer
the relief you need. It provides immediate protection from creditors,
including foreclosure, and lets you spread out your debts over several
years without penalties or interest.
The Law Office of Keith Will Wynne, Esq. has helped hundreds of people
in the Hillsborough County find debt relief through Chapter 13 bankruptcy.
Chapter 13 Repayment Plans
There are several reasons why you would want to be in a Chapter 13 bankruptcy.
- You are behind on your mortgage payment and cannot afford to pay what you
are behind in one payment. You can afford the normal mortgage payment,
you just can’t pay what’s past due in one payment-or the bank
won’t accept any more payments. A chapter 13 can allow you to pay
the normal mortgage payment, and pay back what you are behind over 36-60
months (depending on your gross income).
- You are behind on your normal monthly mortgage payment, and you cannot
afford the monthly payment, but 31% of your gross income is an affordable
payment. A Chapter 13 bankruptcy will allow you to devote 31% of your
gross income to your mortgage-including property taxes, insurance and
whatever you are behind. The court will then will order you and your bank
to mediation within 6 months to attempt a mortgage modification.
- You have assets (any property-whether real estate, vehicles, or even a
stamp collection) that are worth more than you are allowed to “exempt”
in bankruptcy. See What property can I Keep. A Chapter 13 bankruptcy will
allow you to keep all of your property, provided you pay to your creditors
the value of your assets over what you are allowed to exempt. You can
pay that amount off over 36-60 months.
- Your income is too high to file a Chapter 7. This is based on the “means
test”.
Many people are under the mistaken assumption that they will have to pay
all of their debt back in a Chapter 13 bankruptcy. This is not true. Unsecured
creditors (credit cards and personal loans not guaranteed by any collateral)
are only entitled to receive exactly what they would receive under a Chapter
7 bankruptcy, and that is only if you have assets above the amount you
are allowed to exempt.
Chapter 13 bankruptcy is sometimes called a wage earner's plan. Attorney
Keith William Wynne will sit down with you to examine your income, assets,
debts and household expenses. He will then present a plan to the Bankruptcy
Court based on how much you can realistically afford to pay. You will make
one fixed payment each month for 36 months or 60 months, depending on your income.
At the end of your plan, any remaining debt is discharged. Many people
pay only a small percentage of their total debt in a Chapter 13 bankruptcy.
Remember, you do not forfeit any assets in a Chapter 13 bankruptcy.
Freedom From Creditors
The immediate benefit of Chapter 13 bankruptcy is protection from creditors. It stops
home foreclosure, repossession, wage garnishment, bank liens and the harassing phone calls
and threatening letters. If you are behind on your mortgage or car payments,
the payments you are behind can be paid over time as part of your repayment
plan. There are many
benefits of Chapter 13 bankruptcy, including "cramdown" of vehicle loans and protection for co-signers.
