A Chapter 13 is a Debt Repayment Plan. In a nutshell, a debtor’s debts are consolidated into a Chapter 13 plan and a payment plan is developed and must be approved by the Bankruptcy Court. The most common examples of debts that would be included in a Bankruptcy plan are credit cards, medical bills, car payments and mortgage arrearage. For Mortgages, this means the amount you are behind on gets put into the bankruptcy plan to allow you to keep your house. Beginning the month after your case is filed, you must make your current mortgage payments. If a debtor is 6 months behind on their mortgage, those 6 payments are put into the bankruptcy plan. Your Plan Payments will be based on your current income minus your current monthly budget/expenses. Examples of monthly expenses include: utilities, food, gas, car insurance, clothing allowance, medical expenses and of course, your current mortgage/rent payments. A simplified example is as follows: Let’s say your household income is $3,500.00.00/month after taxes and your monthly budget (Including your monthly mortgage payment) is $3,000.00. $3,500.00 minus $3,000.00 equals $500.00. So your Chapter 13 Bankruptcy Plan Payment would be $500.00/month. If you get paid bi-weekly, it would breakdown to $250.00 per paycheck. Foreclosure Tuesday for February is February 1, 2011. This means you must be prepared to make your February mortgage payment once your case is filed.

Please feel free to contact me to discuss your options and save your home from foreclosure.

Ken Parker
404-378-0600