November 19, 2015 By:
Your plan states how much you pay each month—usually much less than you were paying before. You pay that amount for a period usually covering three to five years. At at the end of that time you no longer owe any debts, except sometimes long-term ones like your home mortgage if you so choose, and other possible ones like student loans. The rest of the unpaid debts are discharged, or legally written off, and you are debt-free.
Your proposed plan is built around a detailed set of laws about how you must treat each kind of debt. If you have certain kinds of special debts called “priority” debts—such as newer income taxes or any child support arrearage—those would have to be paid in full over the life of your plan. Secured debts—your mortgage(s), vehicle and furniture loans—are treated in a special way, whether these are paid in full or in part depending on many factors. Debts that are neither “priority” or secured, are called “general unsecured” debts, and are usually paid only to the extent there is money left over to pay them during the span of time you are in the payment plan Especially with “priority” and secured debts, Chapter 13 can give you significant advantages over how these creditors are handled compared to Chapter 7.
You must have a steady source of income to be eligible for Chapter 13–usually wages or self-employment income. But your income can also consist of unemployment benefits, Social Security income, or even rental or other investment income. The more consistent and predictable the income is, the simpler your case will be to put together, get approved by the bankruptcy judge, and successfully completed.
Here are some potential benefits of even a straightforward Chapter 13 case, none of which are available under Chapter 7:
If you live in the Dallas-Fort Worth Metroplex, call me to determine if Chapter 13 is right for you. My name is Carrie Weir, a Texas bankruptcy attorney serving the Metroplex, especially the area around Rockwall, Heath, Greenville, Lavon, Wylie, Mesquite, and Rowlett. Please contact me for a free and confidential consultation, so that you can make an informed choice about your home and the rest of your finances. Call 972-772-3083 or use the contact form here. I look forward to helping you. Thank you.