Filing Chapter 13 can Help you Keep Your Assets

by | Sep 2, 2014 | Lawyer

During a Chapter 13 case, you may retain your property. However, if you have a large number of nonexempt assets, the percentage of secured debt that you’ll have to repay may be higher. Additionally, you must pay off (or continue to pay on) your secured debts if you want to keep those assets. Here, you will learn how your lawyer can help you keep your assets after filing for Chapter 13 in Topeka KS.

Nonexempt Assets are Safe in Chapter 13

In a Chapter 7 proceeding, the court-appointed trustee sells your nonexempt assets and disburses the money to your creditors. Conversely, a Chapter 13 trustee will allow you to keep everything, including nonexempt assets. In return, you agree to pay a portion or all of your debts through a carefully structured repayment plan.

How your Assets can Affect your Repayment Plan

In your repayment plan, certain debts must be paid in full, such as taxes and mortgage arrears. However, the amount paid to unsecured creditors (such as credit card issuers) is dependent upon your expenses, income and nonexempt assets. You’ll be required to pay your creditors an amount equal to the value of your nonexempt property.

Chapter 13 Bankruptcy can Help you Bring Secured Debt Under Control

If you have a loan backed by collateral, that constitutes a secured debt, and if you go into default, the lender can repossess the asset. The most common types of secured debts are car loans and mortgages, and if you get behind on payments, Chapter 13 in Topeka KS allows you to avoid repossession or foreclosure through a repayment plan.

Paying Secured Debts During Bankruptcy

If you want to retain your assets, you’ll need to make regular payments on secured debts. Mortgage defaults can be cured, but you’ll still need to make your current payment each month. If you fail to do so, the lender can petition the court to lift the stay, and they can move forward with a foreclosure.

Unlike home loans, you can pay off a car loan during a Chapter 13 repayment plan. Depending on your location, you may be required to pay off these debts, but some jurisdictions allow you to exclude secured debts from the case. For help in determining which assets to include in your case, you can Visit website to consult a bankruptcy attorney.

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