A repayment plan is required when filing for a Chapter 13 bankruptcy. This plan is designed to give you a way to repay your debts within three to five years. Unfortunately, it is not easy to design such a plan. This is one of the reasons you must work with a bankruptcy law lawyer Orange County.
Your lawyer will create a repayment plan, which is considered a legal tool in helping you get out of debt. It is your personalized road map to pay off your debts involved in the Chapter 13 filing. This plan is like your short-term consolidation loan that will restructure your debts.
Bankruptcy Law Lawyer Orange County to Submit the Plan for Approval
The role of your attorney does not stop at designing your plan. Your attorney will also submit it to court for approval. Once submitted, the budget and your creditors will challenge the plan.
After approval, you will have up to five years to pay for your debt. Some of the remaining debts can be discharged. If that is the case, your financial future will be brighter.
Debts in the Repayment Plan
Keep in mind that when you file for Chapter 13, not all your debts are discharged. Your debts will be divided into three categories:
One is the priority debt. Here, you will pay off the debts within a certain period. But, some debts must stay current. These include back taxes, cost of filing for it, spousal support, and others.
Secured debt is supported by collateral. It is your home mortgage or auto loan. You are required to settle the value of the collateral or entire payment of the debt. You must talk to your attorney about how to treat secured claims.
Your credit cards, medical bills, and unsecured personal loans are your unsecured debts. These debts are likely to be discharged or not to be paid in full.
When creating your repayment plan, you need to use certain software. But, even with software, you will still need the help of a bankruptcy lawyer. Designing a repayment plan can be more complicated than you may realize.
As you work with a lawyer, you can determine whether or not you are eligible for Chapter 13. If you are, then your attorney will design the particulars of your plan. This is where it pays to have an expert on your side. The last thing you want is for your filing to be disapproved.
The details of your repayment plan will depend on your debts and income. As you work with a trained expert, you can easily go through the details.
After creating your repayment plan, you need to file and submit it to the bankruptcy court within 14 days after filing. To help you out with the entire process, though, contact our expert bankruptcy law lawyer Orange County. For an initial consultation, please call: (949)565-4707, (323)524-2123, or (818)960-6460.