Debt Consolidation
CHAPTER 13 BANKRUPTCY, ALSO KNOWN AS DEBTOR’S COURT
The primary purpose of a Chapter 13 case is to allow an individual or married couple to consolidate their bills, lower monthly payments and repay debts while protected by the Court. In Chapter 13 consolidation plans, unsecured creditors, for example, credit cards and medical bills, receive no interest, finance charges or late charges while they are being repaid through the Court. You can stop repossessions, garnishments and foreclosures on property by paying these debts through the Court.
For example, if you are three months behind on your mortgage payments and the mortgage company has scheduled a foreclosure sale, you can consolidate these three payments in your Chapter 13 case and begin paying the next monthly payment direct to the mortgage company. For vehicles, furniture and other secured creditors, you can put the entire debt in your Chapter 13 case and in many circumstances reduce the interest rate paid on these creditors.
The consolidation of your debts in a Chapter 13 plan will typically lower the total amount of money your household spends on its outstanding creditors.
A question we frequently hear is how much will my Chapter 13 plan payments be per month. The determination of a Chapter 13 plan payment is complicated and is based on payoff balances and interest rates on secured debts, for example, cars and homes, as well as the percentage being paid to your unsecured creditors. Because of the complexity of issues in Bankruptcy cases, we don’t charge consultation fees. This allows us to meet with our clients face to face to determine which type of Bankruptcy is best for you and to answer questions that arise. My office is often capable of preparing Bankruptcy schedules the same day we meet with clients.
In Chapter 13 cases, the majority of attorney’s fees and court costs come out of the money you pay into the court each month. We do require a retainer for credit counseling certificates, filing fees and a portion of our fee to file your Chapter 13 case. The retainer fee is based on the complexity of the case and can be discussed with you when you call to make your appointment.