If you are
unable to work out a payment plan directly with your mortgage company, a Chapter
13 bankruptcy may allow you to save your home. Once a bankruptcy is filed, your
creditors must stop all collection activity against you, including foreclosure
proceedings. The past due amounts you owe the mortgage company will be paid
through the Bankruptcy Trustee (the person assigned by the court to administer
your bankruptcy). While you are in a Chapter 13 bankruptcy, you must still make
your regular monthly mortgage payments and keep current with your payments to
the Trustee to prevent the mortgage company from being allowed to go forward
with foreclosure.
If you are unable to work out a
payment plan directly with your lender, a Chapter 13 bankruptcy may allow you to
keep your car. Once a bankruptcy is filed, your creditors must stop all
collection activity against you, including repossession. You can pay for your
car two ways in a Chapter 13 bankruptcy depending on your individual
circumstances, including how much you owe on the car and its market value. 1)
you can pay for the entire amount you owe on the car through the bankruptcy; or
2) you can pay only for the past due amount through the bankruptcy. If you pay
only the past due amount through the bankruptcy, you must continue to pay your
regular monthly car note to the lender.
Typically, a
Chapter 7 bankruptcy is filed to obtain a discharge (you will no longer be
responsible for payment) of an obligation to pay unsecured debt when a debtor is
not in jeopardy of losing secured property such as a house or car. A Chapter 13
is typically filed by a person with regular income when they get behind in their
house, car or other secured obligations. In a Chapter 13 bankruptcy unsecured
creditors are paid a percentage of the debt they are owed depending on the
circumstances of the individual debtor.
If you
qualify, credit card debt would be dischargeable (you will no longer be
responsible for payment) in a bankruptcy. Under certain circumstances you
may be required to repay a portion of your unsecured debt in a Chapter 13 plan. Once you file a bankruptcy, your
creditors must stop all collection activity against you, including telephone
calls and letters. If collection activity persists notify your lawyer
immediately.
All
bankruptcies require that you attend a creditor's meeting, where the Trustee
(the person appointed to administer your bankruptcy) will review the documents
provided when the bankruptcy is filed. Occasionally one of your creditors will
attend this meeting. Your lawyer will attend with you.
In a Chapter
13 bankruptcy, there is also a confirmation hearing, where the judge will sign
the plan you propose to repay your creditors. You will only have to attend that
hearing if your attorney tells you to.
If the loan was
unsecured (no property was pledged to make sure you repay the loan), then even
if you obtain a discharge, the co-signer will be responsible for payment. If
the loan was for secured property (house, car, furniture) no action will be
taken against the co-signer as long as the payments are made.
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