Chapter 13 Repayment Plan | Jeff Kelly Law Offices

Chapter 13 Repayment Plan

When collection calls from creditors are keeping you awake at night or making you want to throw your phone against the wall, you need to ask yourself a tough question: can you actually afford to repay your debts?

Consumer debt from credit cards, car loans, student loans, home mortgages and IRS debts are at an all-time high. So are delinquencies and defaults.

The mounting interest rates can become unmanageable. If you owe back taxes to the IRS, you also might be incurring rapidly growing interest and penalties.

It’s no wonder that so many people with credit cards, car loans, and other debts can quickly find themselves being harassed by bill collectors.

Eventually, the balances owed on these debts can become so high you simply can’t make the payments.

When you put off debt repayment too long, the consequences can be a loss of your home, your car or your job, not to mention your mental health.

So what can you do?

Get Organized

Before I can help you, there are some things you need to do to get organized:

  1. Create a list of all of your creditors and their contact information.

  2. Gather all of the most recent bills and statements from your creditors.

  3. Get a wage statement showing your current income and income year-to-date.

The better prepared you are, the faster I can help you.

Contact Me

Make an appointment with me for a free evaluation. Do this immediately. We will discuss your debts, your income, and other details. If there is no way for you to service your debts, we will discuss Chapter 13 bankruptcy.

If Chapter 13 bankruptcy is not a possible or good solution for you, we will discuss other options that might work better.

It’s important for you to understand how Chapter 13 bankruptcy works, as well as how repayment works when you file for Chapter 13 bankruptcy protection.

I often refer to the Chapter 13 option as the “catch your breath” provision of the Bankruptcy Code. It’s intended to help people who have an income stream and are able to repay creditors over time, but not right now. In other words, there’s hope but you need help.

You need help reworking your debt repayment terms. You need relief from additional interest, penalties and harassing phone calls. And you need time.

I Can Help You

This is where I come in. I can help you get the relief you need.

How Chapter 13 Bankruptcy Works

If you file Chapter 13 bankruptcy, you will be able to stop the collection calls and lawsuits while you make payments to your creditors. You also will be able to stop wage garnishments, foreclosures and repossession of your vehicle. This is called an “automatic stay.”

Chapter 13 bankruptcy does not require you to get permission from your creditors. This is good news for you! How much you pay each month is determined by what you can afford to pay and not what your creditors demand. That’s more good news for you.

To figure out the monthly payment amount, I will propose a budget for you based on all of your debts and sources of income. Next, we will determine an appropriate monthly repayment amount.

The determined repayment amount will be paid to a trustee who will then distribute payments to your creditors. The amount of interest on your debts will be significantly reduced because in Chapter 13 bankruptcy, interest and penalties stop.

The impact of this is important to understand. For example, let’s say you currently owe $10,000 in credit card debt, with an interest rate of 25 percent. Chapter 13 bankruptcy will save you $2,500 per year in interest alone. You can imagine how the total savings on multiple debts can add up.

Depending on your income and budget, we may be able to wipe out all unsecured debt in your Chapter 13 bankruptcy plan. By unsecured debt, we are talking about credit cards or other loans not secured with property such as a vehicle or home.

Stick to the Repayment Plan

But remember, Chapter 13 bankruptcy does require you to make the monthly payment you agree to make.

If you fail to make the agreed regular payment to your Chapter 13 bankruptcy trustee, you will face some potentially damaging and difficult consequences. For one, your trustee can ask the court to dismiss your bankruptcy filing. If this happens, your automatic stay will be lifted. You will lose your rights to have your interest and penalties stopped. Collection proceedings can resume and creditors can begin harassing you again. You might even end up facing lawsuits to collect on the debts you owe.

Ultimately, if you default on your payments to your trustee, the court can choose dismiss your Chapter 13 bankruptcy filing altogether and the terrible cycle of phone calls and mounting interest will continue to plague you.

If this happens, you will need to take steps to try to convince the court to reinstate your Chapter 13 bankruptcy filing. In cases such as this, the court typically will require you to become current with your repayment plan.

Keep it simple and keep your trustee payments up to date in order to avoid these troubles. If you absolutely can’t keep your payments up to date, you may need to consider a Chapter 7 bankruptcy filing.

Contact Me for a Free Evaluation

Remember, Chapter 13 bankruptcy allows you to stop harassing calls, stop accumulating interest and possibly even wipe out all of your unsecured debt. It can also put a stop on accruing interest and penalties on IRS debt.

The sooner you get your debts under control, the sooner you can get some peace back in your life and get back on solid financial footing.

Is Chapter 13 Bankruptcy Your Best Option?

Call me at 770.637.1756 to schedule a free evaluation or request an appointment online here. I will let you know what to bring to your appointment so we can get to work on helping you create a plan to deal with your debt problems.