1) Difference between Chapter 7 and Chapter 13
Chapter 13 is a plan to repay your creditors it helps you make monthly installments and pay back your creditors within a 3 to 5 year time. While chapter 7 on the other hand is for debt elimination. Filing for chapter 13 can also get you rid of parking tickets and tollway violations. Also if you have too many assets, you cannot qualify for chapter 7. So filing for chapter 13 is the best option.
2) Cost and Documents
Chapter 7 has a court fee of $310. Apart from that, you need to pay an attorney who you higher for the process. You can file for chapter 13 anytime, irrespective of if you have filed prior. If you have filed for chapter 7 in the last 4 years, you may not get a discharge. You need to submit your tax returns for the last 4 years and at least 60 days of your payslips. You also need to complete a credit counseling course.
You will have to start paying the trustees is 30 days after filing the case. Based on your income and expenses, what will be your monthly payment is something that has to be calculated. Payment can be done to the creditors by any method it can be paid by money order, a cashier’s check, or it can be withheld from your payroll. You can also pay online.
4) Trustee and Creditors
The Trustee is the person who collects your payments and distributes them to the creditors. Chapter 13 is a public record. However, only the creditors, the Trustee, and recipients of domestic support are notified if you file for chapter 13. When you file you need to make sure that you mention all your creditors. Credit card accounts are closed when you file for chapter 13. The interest rate on your car loan can also be reduced when you file.
5) Debts and Mortgage
The payments of your mortgage will be included in your chapter 13 plan and the foreclosure will stop. On your investment property, you may be able to reduce the principal and the interest amount. A student loan cannot be eliminated. However, a small part of it may be included in the plan. All auto drafts will be suspended upon the filing of chapter 13.
6) Credit Score
Chapter 13 will be there on your credit score for 7 years from the date of filing. If you are married, it is not necessary to include your spouse when you file. However, you have to enlist your Spouse’s income and expenses in the petition. You will never have to attend court in a chapter 13 filing. Only a meeting with the trustee will take place.
7) What happens after?
Once you file for chapter 13 all collection activities are stopped. After 45 days, you will have to attend a meeting with the Trustee. After the meeting, the court will decide whether to approve your plan or not.
8) The right Attorney
After you file, even if you plan to discontinue the same, you can at any time. However, the creditors can start collecting again and you will lose all the benefits of chapter 13. To ensure that nothing goes wrong make sure you consult an attorney before applying. You can also contact Recovery Law Group from Los Angeles & Dallas, TX for the same. Contact – (888-297-6203).