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Chapter 13

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Chapter 13

I need someone who has recently filed Chapter 13 to explain it to me, please! And what impact its had on your credit score?
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Re: Chapter 13

I've never filed but here are the basics:

 

A chapter 13 is where you take all your debt; medical, taxes, credit cards, auto loans, student loans, child support arrears...etc and put them in a big pile at the bankruptcy court.   Your lawyer figures out how much your "unsecured creditors...credit cards, payday loans, some second mortgages..." will get out of the plan.  Usually its zero, but can be as much as 100 percent, depending on your income and assets.  Based on how much the unsecured get and your secured debts or debts you can't get rid of ...cars, house, taxes, student loans....they will figure out how much you have to send to the bankruptcy court each month.  Out of that money, the court will send money to all your creditors.  A lot of times your current house payment will be included in that amount, but not always.  At the end of your plan...from 3 to 5 years...you are done with your bankruptcy and go back to paying regular mortgage payments.  Vehicles are usually paid off in the plan.

 

If you miss a payment, it can get dismissed and you're back where you started.  If you have any really cranky creditors (think car loans you're really, REALLY behind on) they can ask to take back whatever item that is.  Most judges will give you a shot in the case to keep it if you want it, but if you get behind, they may get it.  If they did, they sell it and whatever you owe after the sale is included with your unsecured debt.

 

best of luck

 

REMEMBER, THIS IS NOT LEGAL ADVICE.

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