What is Chapter 13?
A payment plan will have to be developed which will allow you to pay all of your living expenses and secured obligations and a portion of your unsecured obligations. The monthly payment due to the Trustee under a payment plan is based primarily on your income and expenses. If you do not have a regular income, you will not be eligible to file under this Chapter. After the Court approves the payment plan, and all payments due under the plan are made, you will receive the discharge.
Reasons for Filing Chapter 13 Instead of Chapter 7
Removing a Second Mortgage
- If you purchased a home with 80/20 mortgages or if you took out a second mortgage in the past few years, you may be able to remove the second mortgage.
- If the fair market value of your home is below what is owed on the first mortgage, the second mortgage can be removed and the debt associated with it becomes unsecured debt, treated like your credit card debt.
Items to Obtain