A debt reorganization bankruptcy, also known as chapter 13 bankruptcy, allows people in debt to restructure their finances and dedicate their future “disposable income” towards repaying past debts. In bankruptcy payment plans, the debtor(s) has the ability to restructure their debts, prioritize what is important, and make a single monthly payment which then gets divided up to prescribed parties by a bankruptcy trustee.
These “wage earners” plans, or bankruptcy for individuals with regular monthly income, allow you to get caught up on mortgage or car payments, pay off taxes or domestic support obligations, and no creditors are allowed to bother you while your payment plan is ongoing. The largest benefit to bankruptcy payment plans, is that (in addition to not having to pay interest on debt) you do not need to pay off your unsecured debts in full! Your payments are based on what you can afford, and it does not matter whether you have $10K, $20K, or $100K+ worth of debt.
However, there is always the question of “what happens if I get laid off or injured and cannot work while in a Chapter 13 payment plan?” If your income drops while in a Chapter 13 you can convert the case to a Chapter 7 bankruptcy, or we can modify your payment plan to adjust for the change in your income.
Converting your case to Chapter 7 will provide fast relief as you can stop making your court-approved payment plan, and rather the court will proceed through Chapter 7 proceedings, and your discharge gets entered only a few months later.
Modifying your Chapter 13 plan provides piece of mind. Unlike with contractually obligated payment plans, we can modify your bankruptcy plan to account for missed or later payments. We can also adjust your monthly payments based on whether your income or necessary expenses change. The point is, it is only your “disposable income” which gets paid to creditors, so you can afford your monthly bills at home whenever they may come up.
CALL NOW FOR A FREE STRATEGY SESSION FROM A MN BANKRUPTCY LAWYER AT KAIN & SCOTT
Chapter 13 bankruptcy payment plans are not all created the same, and you will want an experienced attorney to help guide you through all your options. Reach out now if you want more information by going now to www.kainscott.com or call 1-800-551-3292. You will be so happy you did.
