Chapter 13 Bankruptcy
A Chapter 13 bankruptcy is a repayment plan under the federal bankruptcy code. In a Chapter 13, you must pay back Creditors, within five years, in full or in part to the best of your ability and you must pay as much as a Chapter 7 would have paid if there had been a liquidation. Any Chapter 13 must always pay back at least as much as a Chapter 7 would have regardless of the state in which you live. By this, we mean if your house would have been sold in a Chapter 7 and would have paid back 20,000 dollars to your creditors, your Chapter 13 must repay at least $20,000. Each local district has its own rules.
HOW A CHAPTER 13 WORKS
Chapter 13 plans operate very much like bill consolidation loans, in that debts are consolidated into one monthly payment which is paid to a Trustee. The Trustee then pays the Creditors. Certain debts such as attorney fees are given super priority and are paid absolutely first. Then taxes and child support are given priority and are paid before the secured debts. After priority debts, secured debts are paid. The last debts to be paid are unsecured debts.
A Chapter 13 is a reorganization of your debt. It will stop foreclosures and the repo man in their tracks. In a Chapter 13 Bankruptcy, you will pay the Trustee all your “available” money for 5 years (generally) and he will pay your debts that are included in the Ch 13. At the end of the Ch 13, all unsecured debt that is left over is discharged. Some things can affect your discharge, such as being behind on a domestic support payment, if you have received a discharge in a case filed under chapter 7 (or 11 or 12) during the 4-year period preceding the filing date of the chapter 13, or in a prior chapter 13 filed within two years prior to filing the new case.
A CHAPTER 13 REPAYMENT PLAN CAN HAVE MANY ADVANTAGES OVER A CHAPTER 7. REVIEWING ALL OPTIONS WITH AN EXPERIENCED BANKRUPTCY ATTORNEY CAN HELP YOU MAKE THE BEST CHOICE FOR YOUR FINANCIAL SITUATION.
Who is the Chapter 13 Trustee?
A Trustee is an attorney appointed by the Court. He is not a judge, although he runs the 341 hearing in both Chapter 7 and 13 cases and will ask questions at the 341 hearing like a judge, but these “hearings” are actually more like depositions.
The trustee does not work for you. He represents the banks and the Creditors that you owe. The Trustee’s major job is to take property from you if he can. This is how he earns his fees. Although you are required to tell the truth at the hearing, this is not the time to brag about how much your property is worth if it is worthless, and it is the time to check your titles to make certain they are properly recorded.
There are three Chapter 13 trustees that administer cases in the Northern District of Georgia:
Mary Ida Townson
Nancy J. Whaley
MOST CLIENTS CAN START A CHAPTER 13 BANKRUPTCY WITH $0 MONEY DOWN FOR ATTORNEY FEES. ONCE YOU FILE FOR BANKRUPTCY YOUR CREDITORS CANNOT CONTINUE TO REPORT ANY NEGATIVE INFORMATION ON YOUR CREDIT FILE AND YOU WILL BEGIN TO SEE YOUR CREDIT SCORE IMPROVE.
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