What are some Advantages of Chapter 13 bankruptcy?
First of all, it gives you the ability to make a single debt payment that is affordable based on your income. You will still have to make most mortgage and car payments, but your unsecured debts are consolidated into the Chapter 13 bankruptcy plan. Secondly, a plan gives you the ability to do other things that are relevant for people in some situations. For example, in Chapter 13 bankruptcy you can stop foreclosures by curing mortgage arrears, cram down car loans, strip off wholly unsecured second and third mortgages, and pay off non-dischargeable tax debts. Ultimately, your plan is based on what you want to accomplish and also on your income, expenses, assets and debts.
Chapter 13 bankruptcy will stay on your credit report for seven years. (Chapter 7 remains on your report for 10 years).
What Will My Chapter 13 Monthly Payment Be?
It depends on your income, assets, expenses and debts. What you will pay is based on a ‘means test’ and budgetary test that incorporates your income, expenses, secured debt payments and other factors. We will do our best to tell you approximately what your monthly payment would be, when you contact us for a free consultation. Determining a Chapter 13 bankruptcy plan monthly payment amount is one of the specialized parts of the Chapter 13 process, and it is one of the reasons that you need an honest lawyer who really knows about Chapter 13 bankruptcy and all the permissible ‘means test’ deductions. Many of these deductions are not common knowledge, even among lawyers.