Reasons for filing Chapter 13 Bankruptcy
The number one reason the chapter 13 bankruptcy is used is to help to save a home or car. If you have fallen behind on the monthly payments the mortgage company will try and put a plan together to help you catch the arrears up. With most of the plans they want their money paid back in a year or less, which makes the monthly payment too high. You have no choice so you try. you stop making car payments and payments on any credit cards trying to save the house. If you default then the mortgage company will start a foreclosure sale.
This is were the chapter 13 bankruptcy would come in. What ever amount you are behind on the mortgage, the whole car amount, credit cards, and any other unsecured debts that you might have will be put in a plan and allow you the next five years to pay back. The unsecured creditors including the credit cards only receive money if there is any disposable income left at the end of the month. By spreading the car out over a new five year plan will lower that payment. I have seen plans that the monthly payment for mortgage arrears, the car, and 10,000 in credit cards was less than the car was before filing.
If you have fallen on hard times and you are behind on the house, car, and everything else talk to a bankruptcy attorney to see how the laws could help you.
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