On the surface, a Chapter 13 bankruptcy can be kind of a complex configuration of numbers and rules to understand. Our team at Kain & Scott is dedicated to complete transparency and communication with our clients—we want you to understand the ebb and flow of your chapter 13 bankruptcy case!
There are certain aspects in a petition that will alter the monthly payments throughout your chapter 13. During your Review & Sign appointment we discuss your monthly expenses; things that include auto loans, 401(k) loans, student loans, etc., amongst everyday living expenses. Throughout the life of the plan, auto loans and 401(k) loans can reach their maturity date. It is excellent to pay those loans off, but now the Trustee views that previous monthly payment you have been making, as new disposable monthly income that is now available to be paid through your chapter 13 plan.
Wait, what?
We breakdown your budget based on every monthly expense you have; food, rent, mortgage, auto loan, daycare, 401(k) loan, tax payments, etc. Once we determine which expenses (loans) have maturity dates, we have to configure that payoff date into your chapter 13 plan. After that payment ends, you now have that amount of money become a part of your disposable monthly income every month. We must make note of that in the plan and adjust your budget to incorporate that new amount of disposable monthly income because it is no longer an expense you are paying.
Don’t panic! The plan can also change to decrease your monthly payments. The most common situations are if there is a noticeable drop in income or you have to purchase a new vehicle. We can modify monthly payments in a chapter 13 to incorporate the changes in life.
Our team will make sure you understand every aspect of your chapter 13! Give us a call today if you are thinking about a bankruptcy or have any questions—we would be happy to help! Go now to www.kainscott.com. You will be glad you did!