Chapter 13 Bankruptcy

A Chapter 13 bankruptcy can be used to cure defaulted mortgage payments, defaulted car payments or to spread out payments of taxes ( Real Estate, Personal and Business)

For example, lets say you have missed your mortgage payments for a year at $1500 per month. You now have an “arrearage” of $18,000 plus all kinds of fees. The mortgage company wants it all now to re-instate the loan but you don’t have that much available. In Chapter 13 you can break that arrearage out into 60 months of payments and catch up over time while stopping the foreclosure in its tracks. You must pick up your regular mortgage payment after you file a Chapter 13. In addition, you can still pursue a loan modification under the ‘Obama” or “ Hamp” plans or otherwise, while in Chapter 13.

The same can be done for Auto loan missed payments, overdue Real Estate Taxes or other taxes. They all can be put into your plan and paid out over 5 years, hopefully giving you the chance to start your own recovery.

Many people utilize Chapter 13 as a solution for tax problems. After filing the IRS usually files a claim. This process sorts out what taxes the IRS claims due, what taxes must be paid in the plan and which, if any, taxes are dischargeable at the end of your case.