Further, the debt repayment plan must include payment of all principal, interest, and penalties on secured debt, and all unsecured debt will be given a pro-rata proportional payment which could be as low as zero depending on budgeted necessary and reasonable living expenses.Like Chapter 7, when the Chapter 13 plan is in effect, creditors are required to stop collection calls, letters, lawsuits, repossessions, foreclosure, and garnishments.
Chapter 13 can be ideal for candidates that have non-exempt property and have incomes higher than the median for a family of their size. The chapter 13 time frame can last three to five years. Chapter 13 involves a meeting with a Trustee and confirmation hearing. Furthermore, chapter 13 attorney fees can typically be packaged into the monthly payment resulting in less upfront attorney fees.
Chapter 13 is a good option to consider if you are behind on your mortgage, or cars and you would like to keep them. Like chapter 7, chapter 13 can discharge uncontrollable medical or credit card debt. As a reminder, mortgages and cars are secured debt (creditor can foreclose or repossess if not paid) whereas medical and credit card debt are unsecured (not connected to any property so creditor cannot foreclose or repossess). Chapter 13 bankruptcy eliminates most unsecured debt including medical, credit card debt and personal loans.
Similar to a chapter 7, after filing a chapter 13 petition for bankruptcy, the automatic stay is in place and creditors are required to stop collection calls, letters, lawsuits, repossessions, foreclosure, and garnishments. Emergency petitions can be filed with as little as your personal information, list of creditors, and taking a credit counseling course. However, with an emergency the Utah Bankruptcy Court requires a completed filing within 14 days.
Chapter 13 Bankruptcy is sometimes called a consolidation bankruptcy because one must devote all of their disposable income to a three to five year plan. Chapter 13 Bankruptcy is a good option to consider if you are behind on your home mortgage or car payments and you want to keep them or reduce the terms of your loan agreement. Chapter 13 bankruptcy is essentially a debt repayment plan where you pay back a percentage or all of your debts over three to five years depending on your income and equity within the assets. During the 3-5 years of your debt repayment plan you are allowed to keep your assets as long as you are able to continue making the regular payments.