Chapter 13 Provides Breathing Room
Video Transcribed: Oklahoma Bankruptcy Attorney Edward Kelley here, answering your bankruptcy questions with oklahomacitybankruptcyattorney.pro. Anyway, we’re in the second video in our series on Chapter 13s. We talked to in the first series, the first video, about who’s a good candidate, somebody with some discipline and the resources to make their plan payment. And now we’re going to talk about how does Chapter 13 help you.
So, you’re coming into a mountain of debt, either making too much to do a 7. For example, in Oklahoma, if you’re over mid forties per person, if you’re one person household, then you might be looking at a 13. Or if you’re losing your home or vehicle and you want to keep it, you’ve got to do a 13, and that’s where those powers come in.
So with all the chapters, the automatic stays, the big one, creditors can’t talk to you, touch you, do anything except through their attorneys, through the bankruptcy court proceeding. So you get breathing room.
You get room to maneuver, figure out, what am I going to reaffirm? What am I not going to reaffirm? What collateral am I going to let go? What am I going to keep without a million phone calls and judgments and lawsuits and summons, et cetera.
In the 13, also you have the power to stop any kind of sheriff sale of your home, any kind of foreclosure. As long as you catch it before the confirmation of the sheriff’s sale, if you then follow through with your discipline.
You make your regular mortgage payments plus your one 60th or less, if your plan is shorter of your arrearage, as long as you pay that, you can eventually save that home.
And you don’t have to convince the mortgage company of anything. As long as you can get a plan confirmed and it’s feasible, the only objections they can make are as to violations of the bankruptcy code, not just because they don’t like it. Same thing with car loans and repossessions.
As I’ve talked about in earlier videos, you can even cram down the amount that you are going to have to pay to the value of the collateral, and the rest of it can be discharged if you don’t have any additional funds in your plan.
Again, the 13 is based on what you can pay, not on what you owe. So those are all the ways a 13 can help you, can reduce the amount of your secured debt, what you have to pay to keep your car, to keep your home, can force creditors to let you keep those and make it up over time.
And it can give you that breathing room and space to get your personal finances reorganized. Like we said, in the first video, if you have some resources and you’re disciplined, a 13 can save the day. Even if you’re not saving a home or a car, even if you don’t have those things, even if you pay 100% of your debts, a 13 still gives you that breathing room and the space to be successful.