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Fort Lauderdale Office

David D Nielson, Attorney at Law

 

 

Chapter 13 Bankruptcy

Chapter 13 of the Bankruptcy Code is designed for individual consumers who either wish to, or need to, repay some or all of their debts. Sometimes, by paying a portion of your debt, like a home mortgage for example, you can keep the home or other property. In other circumstancies, based on income requirements, some people may not qualify for a Chapter 7 and must file a Chapter 13 bankruptcy to seek protection from creditors.  In other cases, you may want to keep your home even through you are behind on the mortgage payments, and if you have sufficient income to pay the arrears through the Chapter 13 Plan for 36 to 60 months, maintain your current mortgage payments, generally you can keep the house. A Chapter 13 can also help with past due taxes in some cases.

In a Chapter 13, you can usually:

  • Stop foreclosure proceedings or car repossessions
  • Repay the arrearage on your mortgage or your car loan over a period of up to five years
  • Eliminate a second mortgage if your house is worth less than what you owe on the first mortgage
  • Pay unpaid taxes over a five-year period

Attorney Nielson can assist you in determining if a Chapter 13 is right for you.  Contact him for a free consultation.

Answers to some frequently asked questions

How does Chapter 13 save my house from foreclosure?
The filing of a Chapter 13 petition at any time before a foreclosure sale stops the sale for at least a period of time. Individuals in Chapter 13 can file a Repayment Plan that provides for the repayment of your mortgage arrears over a 3-5 year period. For example, if you are behind $30,000 on your mortgage, you can generally file a plan that calls for repayment of that amount at the rate of $500/month for 60 months. You would also have to resume making current mortgage payments and all escrow/real estate tax.

I have heard that you can eliminate second and third mortgages in Chapter 13. Is that true?
Sometimes. If the value of your house is less than the amount you owe on the first mortgage (including any arrears), then your attorney can file a motion with the court asking that the junior mortgage (or other liens, like real estate attachments) be eliminated.

How are unpaid taxes handled in a Chapter 13?
Taxes that cannot be discharged in bankruptcy, such as unpaid meals taxes, sales taxes or payroll taxes or recent income taxes can be part of a debtor’s 3-5 year plan.

 

 

 

  • Debtor and Creditor Representation
  • Business Reorganization
  • Chapter 7 & 13 Representation
  • Resources for Post-Bankruptcy Credit Status/Repair
  • Mortgage Loan Modifications