Chapter 13 Repayment Plans

Aurora Illinois Bankruptcy Lawyers & Attorneys

Jesse Barrientes: So what happens then when, hey, maybe I'm $20,000.00 behind in my house payment, and the sheriff sale is knocking at the door?

David Siegel: Well in that case if you're trying to save your home, Chapter 13 would be the best bet, because Chapter 13 basically takes the amount that you've fallen behind on your home, as well as the total amount to pay off your vehicle, and any other debt that you have, and it lumps it all in to one payment. Picture a big pot in the middle of this table.

Jesse Barrientes: Okay.

David Siegel: We're going to put that $20,000.00 of yours in the pot, okay? The total amount to pay off your financed vehicle, say $10,000.00 in the pot�

Jesse Barrientes: So if it's a car that I own and it's not a leased car, it goes in the pot too?

David Siegel: Right. If it's financed, it's going in the pot.

Jesse Barrientes: I have to make the monthly payments on it.

David Siegel: Correct. It's going to be part of this bill consolidation payment that I'm talking about where you're going to pay a trustee a certain dollar amount per month based on your income, minus your expenses. You're going to pay that for the next 36 to 60 months.

Jesse Barrientes: What about my unsecured debt? What about the credit cards? I mean, the reason why I have to do this, and I'm behind, is because the arm kicked in and all of the sudden my mortgage went from $1,500.00 up to $3,500.00.

David Siegel: You're going to have to make the regular mortgage payment on your own again, outside of the bankruptcy. The bankruptcy payment through the trustee consolidates the arrearage, your auto financing, and all of your other debt. So it essentially gives you three to five years to pay off what you couldn't pay on time, but you do have to make your regular mortgage payment. Again, that's a requirement, and you need to do this consistently to have a successful Chapter 13 to save your home in Aurora.

Jesse Barrientes: What happens if during that time I'm not able? For example, I missed a payment that I'm supposed to make on my mortgage? Can we roll that back in there? Can we modify it? What can we do?

David Siegel: Typically, not. It would be a post-petition debt. Here's what you can do. Your chapter 13 bankruptcy lawyer can try and petition the court if you fall behind with the Chapter 13 trustee to move that payment to the back, or to reorganize that payment to make it work. As far as the mortgage that you fell behind on, post-petition, the mortgage company might give you a repayment plan within the bankruptcy, so to speak, where they give you a few months to catch up on the month or two that you fell behind. You almost get another lease on life, another bite at the apple, but once you start missing those payments, your case is either going to be dismissed, or that mortgage creditor is going to ask for permission to avoid the bankruptcy and be able to proceed with the foreclosure, because you haven't made your payments on time to the mortgage, or you haven't made your payments on time to the Chapter 13.

Back to Aurora Illinois Bankruptcy Lawyers & Attorneys

See Also:

Chapter 7

What is Chapter 7?

Chapter 7 income guidelines

Chapter 7 and secured debts

Chapter 7 and unsecured debts

Misconceptions about Chapter 7

Chapter 7 car exemptions

Chapter 7 house exemptions

Life after Chapter 7 bankruptcy

Privacy is protected in bankruptcy