RHODE ISLAND CHAPTER 13 BANKRUPTCY LAWYER
WHAT IS CHAPTER 13 BANKRUPTCY?
To file for Chapter 13 bankruptcy, you must have a regular source of income and have some disposable income. In the bankruptcy petition you will be proposing a debt repayment plan over the course of three to five years. Often the amount of debt to be repaid is significantly less than what is owed.
SHOULD YOU FILE FOR CHAPTER 7 OR CHAPTER 13?
There are several situations where Chapter 13 is preferable to Chapter 7 bankruptcy :
- A Chapter 13 bankruptcy allows people to make up overdue mortgage payments over time, thus saving their home from foreclosure.
- Chapter 13 bankruptcy can remove a second mortgage from a home.
- Chapter 13 can reduce the amount owed on a multi-family home, an investment house or a car loan.
- A Chapter 13 bankruptcy comes off your credit report three years faster than a Chapter 7 bankruptcy.
If you have questions about whether you qualify for Chapter 7 or Chapter 13 bankruptcy and the advantages and disadvantages of each type, Rhode Island Chapter 13 bankruptcy attorney John Simonian will be happy to review your situation and explain your options. Contact his Providence law office or call 401-941-4800 for a free initial consultation.
WHAT HAPPENS AFTER YOU FILE FOR CHAPTER 13 BANKRUPTCY?
Immediately after you file bankruptcy, your creditors must stop trying to collect on your existing debt; this includes stopping any home foreclosure proceedings. The Bankruptcy Court Clerk will mail your creditors a notice of the bankruptcy filing within a few weeks. Until your creditors receive that notification, you may need to supply them with the docket number and date of your bankruptcy.
Most of your debt payments are put on hold while your bankruptcy is pending. However, you should continue to make payments on your car loan or your home mortgage. Always continue to pay your day-to-day living expenses, like rent, groceries and utilities.
About 30 to 40 days after filing the petition, you will be required to attend the “Meeting of Creditors” or “Section 341(a) Examination.” There is no judge for this hearing, just the bankruptcy trustee in charge of your case. Creditors can attend and can ask you questions.
With a Chapter 13 bankruptcy, you and your attorney propose a repayment plan and the bankruptcy trustee is the final decider on the amount you will repay. Typically you will be making payments anywhere from 3 to 5 years, after which time any remaining debt is discharged and your bankruptcy is completed.