People file Chapter 13 bankruptcy when they have fallen behind in their secured debt, such as a home or vehicle, and want to keep the property. Chapter 13 requires a court-approved repayment plan to pay all or parts of your debts over some time, either three or five years, depending on the amount of debt you have and your income. To be able to file Chapter 13, you must have a dependable source of income to be able to make the monthly payments.
When you file bankruptcy, an automatic stay goes into effect, stopping all actions against you from collecting on a debt. This means foreclosures and repossessions will temporarily stop giving you time to make a plan.
Forms to Submit
Your bankruptcy attorney will help you fill out the information needed by the court. You will need to submit who, how much, and the balance due on all of your debt. Part of the paperwork you will submit to the court is your monthly expenses,
- Health care
- Child support
The trustee assigned to your case will establish your monthly disposable income that you will pay to the court on your Chapter 13 repayment plan. By law, your Chapter 13 bankruptcy repayment plan can not last longer than five years.
Payments to the Court
If you are unable to make your court-approved payments on your debt for some reason, you will need to explain the reasons to the court. The court can give you a grace period, approve a new plan, or discharge your debts due to financial hardship.
When you have made all of your payments, the court will eliminate or discharge any of your remaining qualifying debt. If you wish to keep your secured property, you will need to continue to make the payments.
If you are behind in your payments and worry you may lose your home or other assets, contact a Plano bankruptcy attorney to find out how you can get financial relief.