Chapter 13 Bankruptcy
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_WHAT IS A CHAPTER 13 BANKRUPTCY?
A bankruptcy under Chapter 13 of the Bankruptcy Code is commonly referred to as a personal reorganization. One of the principal reasons for filing a bankruptcy under Chapter 13 is to stop the forced sale of an individual’s home, typically Sheriff’s Sales (foreclosures) and Tax Sales. A Sheriff’s Sale is the end result of a mortgage foreclosure action. A mortgage foreclosure action is commonly filed because the owner of a home falls behind with the mortgage payments.
In a Chapter 13 bankruptcy, the mortgage arrearage is calculated and then that amount is used to create a Chapter 13 Plan. The Plan typically provides for repayment of the mortgage arrearages over 3 to 5 years. In a typical Chapter 13 bankruptcy, the Plan will provide that the individual begins making the regular mortgage payment directly to the bank by the first of the month and then making an additional payment to the Trustee during the month. Depending on the amount of the payment, a percentage of the payment may also be applied to the unsecured creditors.
A Chapter 13 Plan may also address real property tax or school tax arrearage, or past due income taxes similarly to mortgage arrearages. The trustee divides the payment among the creditors according to your plan.
Chapter 13 bankruptcies are not always filed to cure mortgage and tax arrearages. Many cases are filed because an individual has either too much income to file a Chapter 7 bankruptcy or too much property to file Chapter 7 bankruptcy.
It is critical that you discuss your situation with one of the bankruptcy attorneys at Amori & Associates to assess your individual financial situation and help create a Chapter 13 plan to fit your individual needs.
ADVANTAGES OF CHAPTER 13
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
A bankruptcy under Chapter 13 of the Bankruptcy Code is commonly referred to as a personal reorganization. One of the principal reasons for filing a bankruptcy under Chapter 13 is to stop the forced sale of an individual’s home, typically Sheriff’s Sales (foreclosures) and Tax Sales. A Sheriff’s Sale is the end result of a mortgage foreclosure action. A mortgage foreclosure action is commonly filed because the owner of a home falls behind with the mortgage payments.
In a Chapter 13 bankruptcy, the mortgage arrearage is calculated and then that amount is used to create a Chapter 13 Plan. The Plan typically provides for repayment of the mortgage arrearages over 3 to 5 years. In a typical Chapter 13 bankruptcy, the Plan will provide that the individual begins making the regular mortgage payment directly to the bank by the first of the month and then making an additional payment to the Trustee during the month. Depending on the amount of the payment, a percentage of the payment may also be applied to the unsecured creditors.
A Chapter 13 Plan may also address real property tax or school tax arrearage, or past due income taxes similarly to mortgage arrearages. The trustee divides the payment among the creditors according to your plan.
Chapter 13 bankruptcies are not always filed to cure mortgage and tax arrearages. Many cases are filed because an individual has either too much income to file a Chapter 7 bankruptcy or too much property to file Chapter 7 bankruptcy.
It is critical that you discuss your situation with one of the bankruptcy attorneys at Amori & Associates to assess your individual financial situation and help create a Chapter 13 plan to fit your individual needs.
ADVANTAGES OF CHAPTER 13
- − It enables the filer to save home, cars and other secured items, even if individual is behind with loan payments
- − An individual has the opportunity to reorganize non-dischargeable debts, such as real estate taxes and income tax debts
- − The unpaid balances of unsecured debts remaining at the end of the plan's term will be discharged
- − The filing of a Chapter 13 bankruptcy stops lawsuits, harassing telephone calls and contacts by creditors
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
513 Sarah Street, Stroudsburg, PA 18360
(570) 421-1406
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(570) 421-1407-Fax
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