In a Chapter 13 bankruptcy, your attorney will help you modify your debts so you can pay your creditors in payments that work for you. You will begin paying in monthly payments and in some cases, you may actually end up paying less in a Chapter 13 bankruptcy versus a Chapter 7. These situations will occur when you keep secured assets. A secured asset is something that you have a lien on, for example, a car that you pay monthly on would be a secured asset, as well as a home loan. In these situations, your attorney will help find a solution that works for you.
Stop Foreclosure
Unlike Chapter 7 bankruptcy, you will be able to stay in your home and have the chance to bring current your mortgage payments. As you pay your monthly payment according to your plan, the bankruptcy trustee makes payments to your mortgage company to bring current your house payments. This allows you to stay in your house as you begin to pay down your debts.
Keep Assets
In Chapter 7, if you do not have money to pay off your creditors, a trustee is appointed to take property that you own and sell it to pay off your creditors. However, by filing a Chapter 13, you have the ability to keep your property because you pay monthly instead. This process applies to any tax refunds you receive. Your attorney may be eligible to receive some of your tax return back.
Reduce Loans
Depending on the age of your loans, you may be eligible for a reduced loan amount or reduced interest rate. In some cases, only the value of the car or item is owed instead of the asset as a whole. However, if you have a newer loan, your attorney may be able to help lower your interest rate so you pay less. This will result in significant savings.
Bankruptcy is a big and difficult step and you want to be sure you are informed in your decision. An attorney at Rulon T. Burton and associates will help you make the most informed and helpful decision for your particular situation. You can contact us today and one of our team members will be able to answer the questions you have. If you are ready to file, our attorneys will make help you make the process easy and bearable.