Chapter 13 Bankruptcy: Answers To Common Questions
Commonly referred to as a wage-earner bankruptcy, Chapter 13 allows for the creation of a debt repayment plan to give you the opportunity to catch up on your financial obligations. The repayment plan lasts between 3-5 years and is designed to fit easily into your budget; after completion of all payments, any remaining unsecured debt is discharged, allowing you to begin rebuilding your financial standing.
The bankruptcy process may at first seem confusing. Below, the Fava Firm provides answers to commonly asked questions about Chapter 13 bankruptcy. If you have additional questions, call the Fava Firm team at 662-546-1540.
How does the Chapter 13 process work?
We will work with you to create a repayment plan that fits into your budget.
Will I lose my house or my car if I file for Chapter 13 bankruptcy?
Chapter 13 was specifically designed to help you keep your home and cars. These payments are included in the plan payment where we are able to reduce interest rates on your car loan and spread any delinquent mortgage payments over the plan term allowing you to become current on your house payments.
What are the costs associated with filing for Chapter 13?
Surprisingly, the costs of filing for Chapter 13 are relatively minimal. Upfront, you are only responsible for a set filing fee, the cost of the required credit counseling program (about $25.00) and a very small portion (about 6%) of the attorney fees.
What happens if I lose my job or experience an income change?
A lot can happen in three to five years. Fortunately, if you experience a major life event that makes it difficult to keep up on your Chapter 13 payments, you may be able to adjust your repayment plan or temporarily suspend your payments.
How does Chapter 13 impact foreclosure proceedings and other debt collections?
A Chapter 13 filing immediately stops all foreclosure proceedings. A filing will also end the annoying calls from creditors and bill collectors, allowing you to focus on your future without the constant barrage of phone calls, emails and letters.
How do I get started?
The first step in filing a Chapter 13 case is to schedule a free consultation with Mr. Fava. During this consultation, you will be offered detailed insight into your options that will benefit your unique financial situation and what you may be able to expect from the process going forward.