Chapter 13 bankruptcy filing and proceedings can be a complicated. Chapter 13 permits you to retain your assets while you reorganize your debts. There is a payment process whereby over a course of three to five years, you make monthly payments to the court. This permits increment payments to your creditors over a specified time period. If, however, you miss one payment, the court can dismiss your Chapter 13 bankruptcy case. An experienced Fort Collins bankruptcy attorney can evaluate your case and explore your options if you are contemplating filing for a Chapter 13 bankruptcy in Larimer County, Colorado.
Payment Plan Proposal
Under Chapter 13 bankruptcy, you are required to submit a proposed payment plan. This will be in effect for three to five years, that is acceptable by all three parties: you, your creditors and the court. Your plan could be rejected by either or both the court and your creditors. The following factors will determine the amount of your monthly payments:
- Your monthly income.
- Amount of secured debts you will continue to pay off.
- Amount of non-exempt assets you must purchase back over the following three to five years.
- Total amount of debt owed to your creditors.
- Total amount of debt your creditors would be able to collect in a Chapter 7 bankruptcy proceeding.
A knowledgeable Fort Collins bankruptcy attorney can aid you with preparing a feasible payment plan proposal.
Secured Versus Unsecured Debt
A secured debt is a debt where an asset subject to the debt serves as the collateral, such as homes or motor vehicles. For instance, a bank can foreclose on your home if you miss your mortgage payments.
Unsecured debts is an obligation or debt that does not have a specific property serving as your collateral, such as unpaid credit card or medical bills.
A Fort Collins bankruptcy attorney notes that you may not have more than $1,484,200.00 of secured debt and $394,725.00 of unsecured debt in a Chapter 13 bankruptcy proceeding.
Declaring Chapter 13 Bankruptcy Advantages
There are many legal advantages to file for bankruptcy under Chapter 13 as opposed to Chapter 7. The most crucial advantages include:
- You may retain your home and you are given time pay any arrears owed to your mortgage company.
- Mortgage modification mediation programs are now available to you.
- While your bankruptcy case is pending, interests are tolled on certain debts, such as student loans or back taxes.
- You can pay off your debts based on a court and creditor approved payment plan.
- Under certain circumstances, your unsecured or “lower priority” liens, such as second mortgages and home equity lines of credit (HELOC’s) from your home, could be reduced or eliminated.
- You have plenty of time to pay off your debts or catch up on payments. This is because the timeline of repayment is stretched over a period of three to five years.
- You are allowed to keep all of your assets and property.
- Your principal loan balance may be reduced to the asset securing value or actual market value of the property under certain circumstances, such as when the debt is more than the actual worth of the asset or property.
A Fort Collins bankruptcy attorney can provide you with more details of these advantages. He can also help you decide whether a Chapter 13 bankruptcy is for you.
Filing for Bankruptcy in Larimer County? Contact a Skilled Fort Collins Bankruptcy Attorney
To make a fully informed decision as to what chapter you should file your bankruptcy case under, it is crucial you are aware of all of your legal options. A seasoned Fort Collins bankruptcy attorney from Holland Law Office can assess your case, provide you with all necessary information and help you throughout your bankruptcy proceeding. If you are contemplating filing for bankruptcy in Larimer County or anywhere in Northern Colorado, contact us at 308-241-0474 today.