What is Chapter 13

Chapter 13: What Is It and What Will It Do For Me?

A Chapter 13 is a part of the Bankruptcy Code that allows you to repay individuals or companies some or all of the money you borrowed from them. Under a court approved plan, you are given from three to five years to repay the debt. 

In the majority of the cases, depending upon your income and expenses, you may only have to pay a portion of the debt. You propose a plan showing how much you intend to pay your creditors. If no one objects to the plan, it’s approved by the Court. Each month you must pay the Chapter 13 trustee the amount you proposed in your plan. In addition, if you own a house, you must also make your monthly mortgage payment to the lender—only if you want to keep your home. 

Chapter 13 may be a viable option if you:

Is Chapter 13 Right for Me?
The most common example of a Chapter 13 is repaying your mortgage company the money you owe them. Suppose that you are ten months behind on your mortgage payments. The lender states that your home is scheduled for foreclosure in 30 days. To stop the foreclosure and keep your home, you have to come up with all 10 payments in full—plus late fees, foreclosure costs and attorney fees. That’s a lot of money to come up within 30 days, which most people don’t have lying around. 

So what can you do instead? File a Chapter 13 bankruptcy petition with a qualified Worcester bankruptcy lawyer by your side. By filing, the foreclosure is stopped. And as long as you begin to make timely monthly payments, you get to keep your home. You must also pay the Trustee the amount you owe the lender over a 3 year (36 months) or 5 year (60 months) period. The Trustee receives a 10% fee on whatever is paid into the plan. 

These are much better terms than having to pay the entire amount in 30 days. This is an alternative to working with the lender who will usually give you six months or 18 months to pay. After that, the lender only wants to foreclose if you’re not making payments. 

Helping You through Chapter 13: John “Jack” P. Morrison, Worcester Bankruptcy Lawyer

Going through financial difficulties can be overwhelming, stressful and scary. But making the decision to file for bankruptcy can give you the fresh start you need to get back on your feet financially. 

My name is Jack Morrison, and if you’re looking for professional guidance from an experienced bankruptcy attorney in Worcester or Clinton, I offer a free consultation to my clients to see if I am the best fit for helping them. I have helped hundreds of clients who were in bad situations get out of debt. 

For a free consultation to see if filing for Chapter 13 is the right decision for you, contact a Worcester, MA bankruptcy attorney from the Law Office of Jack Morrison today at (508) 852-7800.