Round Lake Beach Bankruptcy Lawyer Handles Chapter 13

Chapter 13 bankruptcy lawyer David Siegel states that Chapter 13 allows a person to reorganize their debts and pay back creditors on a monthly payment plan for a period of 3 to 5 years.  During the Chapter 13 repayment plan, the person is protected by the automatic stay in bankruptcy meaning that the person who filed the Chapter 13 bankruptcy will be protected from any lawsuits, communications or collection efforts from the creditors trying to collect on debts owed to them.

Chapter 13 is a consolidation and reorganization of a person’s debts.  When the person who files a Chapter 13 begins this case, all creditors are noticed of the Chapter 13 bankruptcy.  The Chapter 13 essentially brings all of the debtor’s debts into a melting pot.  That melting pot is considered to be the amount of money that the debtor will have to pay back to his creditors.  In most circumstances, unsecured debt such as credit cards, medical bills, payday loans or utility bills can be paid back at a percentage that is less than the actual full amount of the debt.  However, the secured debt such as car loans, car notes or mortgage notes must be paid back in full.  Any kind of mortgage arrears or child support arrears will have to be paid back in full.  Also included in that list are taxes, parking tickets, traffic violations and things of that nature.

For those people who qualify for a Chapter 13, they are in a good situation to save their home from any mortgage arrears and from foreclosure.  Chapter 13 bankruptcy will help a person who is in foreclosure laws because they will be allowed to pay back the mortgage arrears or the delinquent payments for the mortgage within 3 to 5 years and this will stop the foreclosure proceeding.  The end result is a person would be able to pay back their debts and also be able to keep their house out of foreclosure.

Chapter 13 is a great way to pay back debts that are not discharged such as child support or spousal obligations and also delinquent income taxes for the states or the IRS.  If somebody qualifies for a Chapter 13, they should definitely consider it because in the end of the Chapter 13 plan, their debts will be paid and they will be able to receive a fresh start.