Chapter 13 bankruptcy considers your liabilities and reorganizes it to pay it with maximized efficiency. It is best suited for higher-income earners or those with additional assets needing protection. Chapter 13 can also be used to rescue houses from foreclosure.
With Chapter 13 bankruptcies, the amount you’re behind on your house, including your principal, interest, attorney fees, and other costs, is divided by 60. Then you are required to pay that amount, or 1/60th of the total debt, each month at zero percent interest for the next three to five years. The bankruptcy law dictates that the mortgage lender is required to accept that deal. So, if you were denied a home loan modification, this can still save your home.
Some of the dischargeable debts include:
Typically, the same debts that are not dischargeable in Chapter 7 are not dischargeable in Chapter 13, such as child support, alimony, willful and malicious injuries, certain taxes, and student loans.
Typically, you can keep the same assets in a Chapter 13 bankruptcy that you can keep in Chapter 7, such as your house, car, retirement accounts, clothing, and furniture. In addition, depending on how your Chapter 13 plan is set up, you may be able to keep additional vehicles, real estate, or other assets that you would not otherwise get to keep in Chapter 7. Each case is unique.
Potentially, individuals can lose assets in a Chapter 13 bankruptcy; every case is different. There even might be some strategy where we want to lose something in Chapter 13.
Losses are determined on a case-by-case basis. An attorney will work with you on creative solutions to get what you want. In Chapter 13, the essential step is to figure out what you want and devise a plan.
Chapter 13 Bankruptcies take 36 to 60 months from the day you file to the day you receive your discharge, depending on your income and what you’re trying to accomplish in the plan.
In Iowa’s Southern and Northern Districts, bankruptcy plan payments are typically calculated by subtracting your monthly expenses from your monthly income. The difference is the amount that you will pay each month.
Missing one payment during a Chapter 13 bankruptcy isn’t going to be terminal. However, missing a series of payments will be terminal, and your case can be dismissed. You could be barred from filing again for 180 days, depending on your default.
Our firm has ways to help clients who get into that situation and will work to prevent your case from being dismissed.
Most of our clients at Marks Law Firm can generally get financing for a car the day after they file bankruptcy.
In terms of getting a house, you can qualify for Federal Housing Administration, or FHA financing, two years after you file, and you can get conventional financing four years after you file. Our firm has had clients obtain home loans while in a Chapter 13 bankruptcy.
Chapter 13 and Chapter 7 bankruptcies affect your credit similarly: your credit will initially take a hit. How much of an impact will depend on how your score was when you started the process. Our firm has seen that 15 to 24 months after filing bankruptcy, clients’ credit is as high, if not higher, than when they initially filed. For more information on Filing A Chapter 13 Bankruptcy In Des Moines, an initial consultation is your next best step.
For Frequently Asked Questions Regarding Chapter 13 Bankruptcy, please click here.
Marks Law Firm has been proudly providing
legal services as a leading Des Moines Law Firm
since 1938 - Call Us Now - (515) 276-7211
Are you considering bankruptcy? Call or contact Marks Law firm for a completely free, no-obligation consultation.
