Chapter 13 Bankruptcy

Articles Posted in Chapter 13 Bankruptcy

Chapter 13 Bankruptcy is also known as “wage earner” bankruptcy because, in order to file for Chapter 13, you must have a reliable source of income that you can use to repay some portion of your debt. It has also been known as the “consolidation” bankruptcy because it allows you to consolidate the debts you want to keep into one payment while still wiping out the debts that you do not wish to keep. You decide the keep and don’t keep. When you file for Chapter 13 bankruptcy, you must propose a repayment plan that details how you are going to pay back your debts over the next three to five years. The minimum amount you will have to repay depends on how much you earn, how much you owe, and how much your unsecured creditors would have received if you had filed for Chapter 7 bankruptcy. Your bankruptcy attorney will help you work out this plan.If you have secured debts such as a mortgage or vehicle, Chapter 13 gives you an option to make up missed payments to avoid repossession or foreclosure. You can include these past due amounts in your repayment plan and make them up over time. If you have unsecured debts such as credit cards, medical bills, payday loans, etc Chapter 13 still allows for these debts to be wiped out. If you are facing garnishment, a Chapter 13 will stop such creditor actions. A chapter 13 case begins by filing nearly the exact same set of forms as in a Chapter 7 bankruptcy. The court filing fee is $313. In Mississippi, the attorney fee is determined by the court. The individual attorneys decide how much up front of their fee they wish for you to pay. Our standard amount up front is $500, making it a total of $813 up front to file a Chapter 13 case. When you speak to the attorney, they will discuss your specific situation with you and are always up front about any and all costs associated with your case.

There are many types of bankruptcy, but only two types that most Mississippi residents would be interested in. Chapter 13 is what people refer to as bill consolidation, debt relief plan and bill repayment plan.

Where a Chapter 7 wipes out or discharges your debts without any payment, a Chapter 13 proposes a plan to repay your creditors over set period of time. The repayment plan can help you save your house by catching up the mortgage payments and paying off your vehicles at a lower monthly payment.

The unsecured creditors, such as credit cards and medical bills can be paid anything ranging from zero to a percentage of what you owe. The payment plan must be at least 36 months and no more than 60 months and this length is based on upon your ability to pay.