Oops, I did it again.

No, no, Brittany Spears did not file bankruptcy, but I have filed a Chapter 13 for a client.  He came to me in a pinch, because his car had just been repossessed and he wanted to get it back.

I introduced him to chapter 13.  This is an effective tool I used to force his lender to stop the auction scheduled for his car.  They were required by law to stop the sale, just hours before it happened because of my client's automatic stay protection the chapter 13 bankruptcy case provided him.

We came up with an affordable payment plan, and even allowed him to save thousands of dollars on the car, since it was terribly upside-down, where he owed much more than it was worth.   I was even able to allow him to pay back just 10 percent of his unsecured creditors, namely his credit cards and medical bills, discharging them in full upon the completion of his case.

I also was able to help him have an affordable payment plan, stretching the payments over 5 years, which helped keep his payments low.

Check out my Chapter 13 YouTube video here, where I get in to more detail on chapter 13 bankruptcy to help save a car.

https://youtu.be/sYLaLdyB7Vs

Chapter 13 bankruptcy may not stop prosecution for fraudulent receipt of unemployment benefits.

A recent decision by Judge Cassling of the Northern District if Illinois Bankruptcy Court,  In re Dawn Marie Sori, bankruptcy case 12 B 01108,  finds that the Attorney General and the Illinois Department of Employment Security (IDES) did not violate the automatic stay provisions under the US Bankruptcy Code.

Specifically, the actions taken by the Attorney General and IDES are excepted from the automatic stay under 11 U.S.C. § 362(b)(1) and (b)(4).  The debtor received numerous payments of unemployment, which were later to be determined fraudulent.   The debtor filed for chapter 13 bankruptcy protection and sought to pay this debt back under her chapter 13 repayment plan, and IDES even filed a proof of claim in this case.

The attorney general filed a criminal complaint against the debtor in DuPage County, IL. An arrest warrant was issued, and the debtor surrendered, and was required to post a $1000 bond.  The debtor filed a motion for sanctions that these actions were a violation of the Automatic Stay protection that the debtor is entitled to, and requested damages pursuant to 11 U.S.C. § 362(k)(1) which provides a remedy for the debtor to recover her damages.

Judge Cassling, citing various caselaw, ruled that the actions were excepted under the exceptions to the automatic stay, 11 U.S.C. § 362(b)(1) "states that the filing of a petition does not operate as a stay “of the commencement or continuation of a criminal action or proceeding against the debtor[.]”  Further, Judge Cassling indicates the legislative history of that code section notes that "the bankruptcy laws are not a haven for criminal offenders, but are designed to give relief from financial over-extension."

Judge Cassling further indicated, that the debtor did not meet it's burden, even when looking at the minority opinions when analyzing relevant case law.  Judge Cassling states "because the Debtor has failed to establish that either IDES or [Attorney General] acted in bad faith or that their primary motive was to collect a pre-petition debt, the Court finds that their actions are excepted from the automatic stay even under the narrower interpretation of § 362(b)(1).

The full opinion can be viewed here.  
http://www.ilnb.uscourts.gov/sites/default/files/opinions/33538_Sori%20stay%20violation-sanctions.pdf

So, while the IDES may play along with the bankruptcy, they don't have to, especially if the plan is not paying 100% to the unsecured creditors.   There is no guarantee that a debtor would complete a case.  I haven't seen any objections in chapter 7 cases in over 10 years, but it doesn't mean they cannot still proceed with criminal prosecution for fraud.   

Chapter 13 bankruptcy can get rid of your second mortgage. File for No money down*

Are you faced with foreclosure?
Do you owe more on your first mortgage than your home is even worth?
Do you want to get rid of your second mortgage?

I can help!
Chapter 13 bankruptcy can strip off a second mortgage (and even a third) if you owe more money on the first mortgage than your home is even worth.   With the huge real estate value collapse we've seen over the last 5 years, homeowners are frequently upside down on their homes.  They are forced to attempt a short sale, which is extremely difficult.   They have to negotiate with their second mortgage companies to agree to take less than what is owed, then are stuck owing a deficiency balance, or if the bank writes it off, they are hit with a huge tax bill, since they are liable to pay taxes on the amount reduced, just as if that was income.

So, debtors often turn to chapter 13 bankruptcy to help.
What I can do with a chapter 13 plan is to catch them up on their first mortgage if they are behind.
I can also force the second mortgage to be paid the same rate as credit cards, medical bills, utilities and other unsecured debts.   At the end of the plan, the second mortgage is required to release their lien on the home.

Hopefully, by the end of the 3 to 5 year chapter 13 bankruptcy repayment plan, their home would increase in value and the debtor would be in a much better position, especially if they look to sell.

This cram-down or lien stripping is done either thru the chapter 13 plan, by motion in the chapter 13, or by adversary proceeding, depending on the judge in your case.

For example, lets, say you bought your home for $300,000.   You took out a first mortgage of $200,000  and a second mortgage of $100,000.  Then, say today the home is just worth $180,000 because of the real estate/mortgage crisis.

I can set up a case, where you would pay $166.67 month toward that second mortgage (through your chapter 13 plan payment). You would not need to make the regular monthly payment on that second mortgage.   Using the cram-down and lien strip provisions of the chapter 13 bankruptcy code, you would pay this for 5 years.   At the end of that time, the second mortgage would be required to release their lien.

Call me today for a free bankruptcy consultation and I can show you your savings!
312-3460-7400.
Let me lead you to financial freedom and a fresh start.

If you mention this post, I am offering to file Chapter 13 cases for no attorneys fees up front, you'll just pay court fees of $310 and $35 each for credit counseling and debtor education courses.

*This is limited to first time chapter 13 filers, must be employed full time, and must go onto payroll control for your chapter 13 payment plan.

Good news for homeowners - Foreclosures are down to Pre-Mortgage Crisis levels

Foreclosure filings across the country decreased in June to it's lowest levels since 2006 when the housing market collapsed, Bloomberg News reported today. Homes reporting an official default, foreclosure sales auction or repossession totaled 107,194 last month, down 16% from last year, and the lowest since June 2006 reports RealtyTrac Inc. in a report issued today. That doesn't mean that there aren't thousands more who are a payment, two, or three payments behind or more, however. Chapter 13 can still help. It can cure arrears, it can also pay down unsecured second mortgages pennies on the dollar in many instances for those who are still upside down on their homes. Values are bouncing back, but still not as quickly as many hope . Contact us for a chapter 13 review to see if it would be right for you. Leeders & Associates www.LeedersLaw.com 312-346-7400

Is your student loan company not working with you as to agreeable payment terms?

Chapter 13 bankruptcy can be a way to resolve this. With chapter 13, you'll pay back a portion of your unsecured debts, usually from 10% up to 100% based on your income and assets. You can stretch these payments up to 5 years. The student loan company cannot collect from you during the bankruptcy. You can make additional payments to pay it down though, as the interest will still run on the unpaid portion while you are in the case. Most debtors are able to work out more agreeable payment terms with the student loan companies after the chapter 13 is completed. Contact us today at 312-346-7400 or visit LeedersLaw.com for more information. We offer free consultations too!

Let's get your car back by filing a chapter 13 bankruptcy

Here is a recent decision involving a case where a vehicle was repossessed prior to a chapter 13 bankruptcy. With Chapter 13 filings, the creditor must return vehicle to debtor, otherwise it is a violation of the automatic stay provisions. Now, a bankruptcy must be filed within 21 days of the repossession or the vehicle is sold at auction, and then it would be too late. But here, the Court, on appeal, ordered that the debtor's motion for sanctions should be granted for failure to give the vehicle back timely.


7th Circuit Cases
Civil - Bankruptcy
Thompson v. General Motors Acceptance Corp., LLC, No. 08-2077 (5/27/09). Appeal, N.D. Ill., E. Div. Reversed and remanded.
Bankruptcy Ct. erred in denying debtor's motion for sanctions based on creditor's retention of debtor's vehicle, which had been seized prior to debtor's filing Chapter 13 bankruptcy petition. Debtor had equity interest in seized vehicle, and creditor's refusal to return seized vehicle prior to debtor establishing ability to provide adequate protection of creditor's interest in said vehicle violated Bankruptcy Code's stay put provisions. As such, creditor was required to immediately return seized vehicle to debtor's estate upon debtor filing Chapter 13 bankruptcy petition and then seek protection from Bankruptcy Court.

Chapter 13 can help you stay out of foreclosure court

Chapter 13 can consolidate your debt, pay back your mortgage arrears with no interest, and help save your home from foreclosure.

Cook County's foreclosure court has increased the number of judges from 10 to 14, starting their new schedules Monday.

The Chicago Tribune reports that in Cook County, foreclosures are up over 47 percent for the first half of 2008, and total cases are expected to pass 42,000 by the end of the year.

Contact a bankruptcy attorney in your area and they can help stop the foreclosure, eliminate the stress and help get you back on track.

interactuve chicago area foreclosure report

Crain's Chicago business recently posted a page where users can see what foreclosures have been filed in the area, searchable by zip code. Check out their interactive foreclosure report here.


Chapter 13 bankruptcy can stop foreclosure action up until the sale date. The Chapter 13 bankruptcy will be designed to cure your mortgage arrears over the next 3 to 5 years, while consolidating your other debt, by paying your secured debt off, and paying your unsecured debt from between 10% to 100% of the total.

Contact me for a free bankruptcy evaluation.

Protecting assets in Chapter 13

Subject: bankruptcy
Question: I have thought about filing for bankruptcy, we bought a motor home when our finances were better, they have changed. with expenses of house payment and motor home payment and every day expenses it is getting too much. I am 66 and not working. my husband works because of health care and need the money. his income is around 19,000. we have a little in 401K. what will we be able to keep and can they garnish his wages and take our 401k?

Answer: This would depend on if you have any equity in the assets. Each state has exemptions to protect assets. Speak to a local attorney to do an asset/equity analysis, and if you don't have much equity, then you may qualify for chapter 7. If you have too much, then you would look at Chapter 13 to repay enough debt to protect the asset.

Quick fire questions and answers

Here are some quickfire bankruptcy questions and answers I've been getting lately. Many of them are about tax refunds, and what to do to finish a bankruptcy. Read up and enjoy!

Here is an updated bankruptcy question and answer session. As you can see there are many bankruptcy issues that can sway a case one way or another. Hold tight, here we go.

Chapter 7 and Lump sum SSDI payment

Question
My daughter applied for SSDI over 2 1/2 years ago. Her husband left her 2 years ago. Their divorce comes up in March. She just received a lump sum payment from Social Security for her disability. She has not paid any of her credit cards, etc. for the past two years however I have been paying her car payment; titled jointly. I have been paying all her expenses the past two years with the agreement she pay me back when she got her settlement. She is planning on filing Chapter 7. Does she have to disclose the lump sum payment of social security disability? She owes me $8k of the $15k she received. What effect will that have on her filing? Also what happens to the car since it is in her husband's name also? She would like to keep it. Thank you.

Answer
Yes, she would disclose it. Her attorney will use state exemptions to protect it. She should not pay you, as the trustee in the case can then come after you for the funds.
For a cosigned debt, she can choose to reaffirm the debt so she can keep the car, and should continue to make the regular payments on it.
She should talk to a local bankruptcy attorney to get state specific advice.

Subject: Motion for Deficiency

Question
I live in Ohio. Filed Ch.7. Surrendered our condo to the trustee, he abandoned the property,it went into foreclose and sold at auction. I recently received a notice for motion of deficiency filed by the condo association, which by the way was listed in the original filing. Do I owe this money? What happens if I don't go to the hearing?
Thank you
Answer
If you listed the debt in bankruptcy, then the bankruptcy discharged your obligation for this debt. I assume this is a state court motion, where they may be asking for $ from the lender, as they usually have a condo association lien on the property.
IF it is a bankruptcy motion, you should speak to your attorney.

Subject: chapter 7 and tax refund

Question
i live in wisconsin a few years back i was involved in a car accident. the womens attorneys sued for 85,000 and it was granted. i want to file chapter 7 since i really have no assets at all to get rid of this judgement.i still desperately need my tax refund which should be significant w/2 children.is it better for me to file my taxes before or after i file for bankruptcy?should i anticipate them taking a portion or all?i am extremely stressed about this due to having to pay for child care. thank you very much.
Answer
Each state has exemptions to protect assets. You should meet with a local bankruptcy attorney to advise you how to protect your assets and when is the best time to file a case. Car accident debts are normally dischargeable, unless there was DUI/DWI or intentional injury.

Subject: Filing taxes post bankruputcy discharge

Question
I have completed a Chapter 7 bankruptcy during 2007. I am unsure how, or if, I am required to report that to the IRS. I owe no back taxes, and taxes were not apart of my bankruptcy. All of the debt that was discharged was consumer credit debt. I maintained my home,car and personal belongings.
Answer
As far as I know, there are no special deductions or exemptions to list when filing your taxes in regards to your bankruptcy. You should mention it to your tax preparer just in case, since I am not a tax expert, and the tax code is as big as the bankruptcy code!

Subject: Getting out of Bankruptcy

Question
I need to know how can refinance my home loan and get out of bankruptcy.
Answer
I assume you are in chapter 13 bankruptcy. You will need to seek out a lender and get a proposed refinance contract. Then get that to your attorney to draft a motion to permit you to refinance. You should also order a payoff statement from the trustee. Once the motion is granted, (court will look to see if it is reasonable and necessary, comparing costs before and after etc.) then you can close on the loan and turn the proceeds over to the trustee to distribute to your creditors. You should allow about 30 days for the motion to be heard and granted.

Subject: chapter 7 questions

Question
My wife and I recently filed chapter 7(with an atty).I would like to know if I can talk to a lender about the terms of my loan.To be more specific,We own an RV and wish to keep it.However,I/we are not going to "reaffirm".The main reason is I know that the bank doesn't want it and I don't want to be responsible in the future if I cant continue to pay.At the present time we are current on our payments and are continuing to pay.Is it reasonable to ask them to reduce the loan amount or interest rate to help us as long as we continue to pay?.............more important,........Is it legal?

Thank you in advance for your time and help.Please be advised that your answer may generate more questions.I/we ahve talked with our attorney about alot,however he is on his honeymoon at this time and unavailable.
Answer
If you do not reaffirm, then there is no negotiation with the lender. The reaf may have better terms for you. if not reaffirmed, the lender has the right to the items back. IF you pay for them, it would be up to the lender if they will agree to let you keep the items if you are current. Since the RV may have some resale value, you need to speak to them directly about the options available if you do not want to reaffirm. They are under no obligation to let you keep the RV, even if you are current, if you don't sign the reaffirmation.

Subject: Chapter 7

Question
Went in for a consultation for chapter 7 but new questions arise after the consultation.
1. Been in SC for a year now planning on moving back to GA in a couple of months. Should I go ahead and file it now in SC or wait?
2. The lawyer told me to list my assets. Do I have to list my furniture/TV(I do not want to lose it)?
3. The lawyer also told me something about Chapter 722(something about car loan) do you know what kind of car I can get?
4. Should I file taxes before or after I file?
5. If I do list assets will a trustee actually come out to see it?
Answer
1. You would need to still file in SC for 90 days after you move.
2. List all assets, and your attorney will use the state exemptions to protect your assets so that you can keep them.
3. 722 is where you can buy your car for fair market value as opposed to paying off the balance of the loan. They can help you finance something after bankruptcy too.
4. Check with your attorney to see what portion of the refund may be protected.
5. Rarely does a trustee investigate assets. You sign the papers under oath, so be sure to list all of your assets.

Subject: chapter 13

Question
I have about 22,000 in unsecured debt. All very high interest rates (cc's and 3 personal loans). I tried consolidating part of my debt into a personal loan of 10,000 6 months ago. The consolidated loan is 24% revolving and in 6 months i only managed to bring down the total 100.00 dollars, and now I am even farther in debt and can't make ends meet. My minimum payments are 700 dollars monthly. I make 37,000 a year and own my home and don't want to lose it. I will need a care within 3-5 years. If I take the chapter 13 route, what would I expect to lower my payments too monthly and will the recent 10,000 unsecured loan (it was deposited in my account, however no luxuries were purchased with it, it was used for repayment of personal debt), affect my filing. I can't go on like this, I can not even barely make these payments of 700.00. I live in PA.
Answer
With Chapter 13, you would pay back anywhere from 10-100% depending on your income, and depending on your assets. You would pay this debt back with little to no interest. Speak with a local PA bankruptcy attorney to find out the exact percentage of repayment based on your individual situation.

Subject: Chapter 7

Question
Hello,

I have filed Chapter 7 and included my home (in Georgia). The mortgage attorney has a court date of January 31, 2008 for a motion of relief from stay. Will I be notified as to how soon I need to vacate the property or approximately how long will I have left to remain on property? I asked my attorney and was told 2-3 months after filing date. I just wanted to see if I could get a more definite time frame. Thank you in advance.
Answer
Once the stay is modified, the lender will start the foreclosure process. Foreclosures can be up to 9 months, depending on the case and the jurisdiction you live in. You would have a bit of time to stay in the property and to find alternate living arrangements. The bankruptcy will eliminate the balance owed on the mortgage.

ARM's and Conversions in Chapter 13

Here is a question I received the other day about conversions in relation to Adjustable rate mortgages.

Question
I am in Chapter 13 now and have a ARM that is going up, can I file Chapter 7 now?

Answer
Hi Gary.

A short answer is tricky. It would depend on the reason you filed chapter 13 in the first place. I assume also that your chapter case is still pending and are asking if you should convert to chapter 7. If you are in an asset driven chapter 13 (to protect an asset with a large value greater than your allowable exemption) the court would liquidate the asset. So, if you had a lot of equity in the home lets say, then the court would sell your home to pay the debt. If you filed ch7 less than 8 years before the chapter 13, you cannot convert. If you have disposable income or do not otherwise pass the means test, then you shouldn't convert the case. You should convert the case only if you have no equity in assets, you are current on the home, or were looking to surrender the home. You also have the option to modify your bankruptcy payments if your expenses have increased drastically. There are some limitations, so you should contact your lawyer about your intentions either way to help decide your best plan of attack. Sorry about the vague answer, but there are many scenarios to account for!
Thanks
Terry Leeders

Chapter 13 Plan cannot run more than 60 months

I received an email on a discussion board, and received the same motion from a current client of mine this week. She writes: I received a motion to dismiss my Chapter 13 case from the trustee because my case is running more than 60 months. I am current on my payments, whats up?

What happened is that the chapter 13 trustee's office audited the creditor claims that came in. Your creditors send in proof of the balances owed on each of your debts. Your claims must have come in higher than you had estimated when you filed the case, or else you may have missed one.

Anyways, your plan must complete in 60 months, otherwise your plan is not 'feasible' under the bankruptcy code. You should contact your attorney to review the claims, make sure none are 'doubled up' and have the lawyer prepare a modified plan. If all of the claims are accurate, you would need to increase your plan to allow the case to complete in 60 months. The alternative is to make a lump sum payment to cover the overage. That is often difficult because the chapter 13 uses all of your monthly disposable income.

Deficiency balance allowed as an unsecured claim in Chapter 13 in Northern District of Illinois

Northern District of Illinois - Eastern Division Chicago Bankruptcy Judge Squires recently ruled in the chapter 13 case of Linda J. Blanco, 06B 13223, where debtor tried to surrender a vehicle in full satisfaction of the claim owed. Judge Squires

The Court held that "the Debtor may not surrender the collateral in full satisfaction of the debt to the Creditor. The Creditor is entitled to seek its available state law remedies, including its right to an unsecured deficiency claim after liquidation of its collateral."

Judge Squires follows the minority argument in other jurisdictions, but it is also supported by fellow Chicago Bankruptcy Judge Schmetterer. This argument states that that when the collateral is surrendered, "the bankruptcy estate no longer has an interest in the collateral for purposes of § 506." Wherefore, the “hanging paragraph” does not preclude the creditor from claiming an allowed unsecured deficiency claim under § 502.

Judge Squires continued:
"Judge Schmetterer in the Morales case followed Judge Shefferly’s logic in Particka, and he aptly explained the interplay between § 506(a) and § 1325(a)(5)(C):

if a debtor surrenders the vehicle, the interests of parties in the collateral and the impact of § 506 changes. Section 506(a) applies only to “an allowed claim of a creditor secured by a lien on property in which the estate has an interest. . . .” 11 U.S.C. § 506(a). If a confirmed Chapter 13 plan provides for surrender of a vehicle under § 1325(a)(5)(C), the estate no longer has an interest in the vehicle. . . . When . . . . the debtor surrenders the vehicle and the estate no longer has an interest in the property that secures a claim, there is no reason to use the valuation process provided in § 506 to determine the amount of the allowed secured claim. Rather, once the vehicle is surrendered to the creditor pursuant to § 1325(a)(5)(C), the value of the creditor’s secured claim is determined under state law, Illinois U.C.C., 810 ILCS 5/9-610-624. "

Chapter 13 Debt ceiling increase

Effective April 1, 2007 :

The upper threshhold of who can be a debtor under chapter 13 has increased.

the ceiling on debts in Chapter 13 will increase to $336,900 for unsecured debts and $1,010,650 for secured debts.

These limits apply to liquidated debts only; which most are. Unliquidated debts are not lumped into this calculation.

Free Credit Reports for bankruptcy filing

The bankruptcy code states that if you do not list a debt in a bankruptcy petition....

1. It is bankruptcy fraud
2. It is not dischargeable.

What are you to do?



Well, if you are filing for Chapter 7 or Chapter 13 it is advisable to provide your attorney a list of all of your debts, including recent copies of your 3 credit reports. Although some attorneys help their clients to obtain them (I do!), often they leave it up to you, the consumer.

Well, a few years ago, the FTC- Federal Trade Commission mandated that consumers are now entitled to one free copy of each of the three credit reports, once per year. Woo Hoo! Free stuff from the government!!



The FTC site at www.ftc.gov goes on to explain the specifics, which I quote below



Your Access to Free Credit Reports

The Fair Credit Reporting Act (FCRA) requires each of the nationwide consumer reporting companies – Equifax, Experian, and TransUnion – to provide you with a free copy of your credit report, at your request, once every 12 months. The FCRA promotes the accuracy and privacy of information in the files of the nation’s consumer reporting companies. The Federal Trade Commission (FTC), the nation’s consumer protection agency, enforces the FCRA with respect to consumer reporting companies.

A credit report includes information on where you live, how you pay your bills, and whether you’ve been sued, arrested, or filed for bankruptcy. Nationwide consumer reporting companies sell the information in your report to creditors, insurers, employers, and other businesses that use it to evaluate your applications for credit, insurance, employment, or renting a home.

Here are the details about your rights under the FCRA and the Fair and Accurate Credit Transactions (FACT) Act, which established the free annual credit report program.

Q: How do I order my free report?

A: The three nationwide consumer reporting companies have set up a central website, a toll-free telephone number, and a mailing address through which you can order your free annual report.

To order, visit annualcreditreport.com, call 1-877-322-8228, or complete the Annual Credit Report Request Form and mail it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. The form is on the back of this brochure; or you can print it from ftc.gov/credit. Do not contact the three nationwide consumer reporting companies individually. They are providing free annual credit reports only through annualcreditreport.com, 1-877-322-8228, and Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.

You may order your reports from each of the three nationwide consumer reporting companies at the same time, or you can order your report from each of the companies one at a time. The law allows you to order one free copy of your report from each of the nationwide consumer reporting companies every 12 months.

As always, this blog does not create an attorney client relationship. I am a debt relief agency, and help people file for bankruptcy under the bankruptcy code.

Now that the legal mumbo jumbo is out of the way, if you want any further bankruptcy information about chapter 7 and chapter 13 bankruptcy filings, feel free to contact me at 312-427-7400 or visit my websites at Leederslaw.com or ChicagoBankruptcyNetwork.com

Chapter 13 to Stop home foreclosures

Chapter 13 bankruptcy

Chapter 13 Stop mortgage foreclosure
Keywords: chapter 13, bankruptcy, foreclosure, consolidation, chapter 7, mortgage, mortgage default, credit cards, medical bills, interest rate, ARM, adjustable rate mortgage
Stop Foreclosure
Yes, you can save your home!

Using the chapter 13 can strategically help you cure your mortgage default, protect your equity and eliminate your other debts to help you right the ship.

Several years ago, we saw a boom in mortgage lenders offering low adjustable rate mortgages (ARMS) 100% to 110% mortgage loans, and no money down mortgages.

Today, we have seen these ARMS increase from 5% to 8%, 9% or more depending on the lender. Homeowners are being bombarded with a mortgage payment that is almost double than it had been previously before the interest rates have started to rise.

What is a homeowner to do? With the soft real estate market, homes have not appreciated in value, or not enough to allow homeowners to refinance and use some of their equity to help with the higher rates.

Chapter 13 is an option. In a nutshell, consumers can file chapter 13 which will let them catch up on their mortgage payment, interest free. It can also consolidate their other financed items and often save money on the interest rates. Currently, debtors can pay cars, furniture and jewelry back at prime rate of interest or prime +2, or +3. Bankrate.com shows a current prime rate of interest at 8.25%.

Consumers can also consolidate their credit card debt, medical bills and other consumer debts and pay them back, with little or now interest, and often can pay them as low as 10 cents on each dollar owed!By doing this, consumers can cure any mortgage arrears, pay off their secured debt for vehicles and for big ticket financed items, while eliminating their consumer debt. A Chapter 13 bankruptcy can run from 3 to 5 years. This depends on your monthly household disposable income. There are several recent changes to the Bankruptcy Code that can affect this repayment plan. These changes were part of the BAPCPA reform. Therefore, it is crucial to discuss with an experienced bankruptcy lawyer about the various law requirements and qualifications based on your unique situation.

For instance, let’s say Johnny Consumer owns a home worth $100,000 in Chicago, Illinois. Let’s say he has a $70,000 mortgage with the bank, but has fallen $6,000 behind and the mortgage company has started a foreclosure. Johnny was recently out of work do to an injury on the job. He has just went back to work, and sees no way to catch up $6000 any time soon. He has $10,000 in medical bills. He owes $3000 on his car. For our example, let’s say that Johnny makes $3000 per month and takes home about $2100. His mortgage is $700 a month, his car note is $300 and he has $67 left at the end of the month to use to try to catch up with the medical bills and the mortgage arrears.

At first glance, there is no way he can manage this on his own. Under a chapter 13, Johnny can make a monthly payment of $367 to the court. This will allow him to catch up on the mortgage, pay off his car note, and eliminate the medical bills he has. This will only take 3 years. It will protect all of the equity he has in his home and stop the foreclosure!

Therefore, if you are looking to stop foreclosure, and have steady income, Chapter 13 could be a great tool to use. You can always refinance or sell your home while under Chapter 13 if you wish to pay off the bankruptcy and move on with your life. The Chapter 13 stops the foreclosure immediately. Often, your only other option would be to refinance, or enter into a repayment agreement with your mortgage company. All too often, they want a double payment each month until you can catch up. If you had that kind of disposable income, you probably wouldn’t be in this situation in the first place.

Contact an experienced Chapter 13 bankruptcy attorney today to discuss these options. You don’t need a home to file either. Often consumers just wish to get a better deal on their old car note, consolidate their credit card debt to eliminate the high interest rates…or wish to consolidate their old student loans and parking tickets. There is a way to pay back old IRS debt as well as pennies on the dollar.

Pick up the phone and call me at 312-427-7400 and I’ll be happy to give you a free consultation by phone or schedule an appointment at one of our convenient office locations.
We also have a free online legal evaluation to try as well.

The time to act is now if you want to save your home from foreclosure.