Chapter 13 bankruptcy also known as "wage earner bankruptcy " is an interest-free debt repayment plan that allows debtors to consolidate their debts. Repayment plans usually last 3 to 5 years. After the debtor completes all of the payments under the chapter 13 plan the debtor will be entitled to a discharge which will exempt the debtor from all debts provided for by the plan or disallowed. One very important thing to remember about Chapter 13 bankruptcy is that you must have a steady income for your repayment plan to be approved by the court. Not only must you be able to pay for your monthly living expenses, but you must also be able to make a payment to the court to consolidate your debts.
Stop Creditors From Repossessing Your Vehicle
Chapter 13 can stop creditors from repossessing your vehicle(s) and allow you to make payments according to a Chapter 13 payment plan which will be ordered by the trustee. If your car, truck or other vehicle is about to be repossessed filing a Chapter 13 can stop the repossession. If the vehicle has been repossessed but hasn't been sold by the creditor prior to the case being filed, the court could order the creditor to return it to you. However, It is always better to file your Chapter 13 action before you vehicle gets repossessed since afterward it may be to late.
Stop Home Foreclosure
Are you facing foreclosure? Did you know Chapter 13 bankruptcy can stop the foreclosure process of your home any time prior to the sale, and allow you to repay your mortgage through a repayment plan ordered by the court. You will still be required to make all the future mortgage payments directly to the mortgage company; however, they may not foreclose to collect any outstanding mortgage payments.
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