If you are having trouble paying the mortgage on your Alabama home, the lender may move to foreclose on the property. However, it may be possible to avoid that by filing for Chapter 13 bankruptcy. It may also be possible to keep other assets such as a car or money in your bank account by filing for Chapter 13 protection.
How to determine if your eligible for a Chapter 13 proceeding
To file for Chapter 13 bankruptcy, your unsecured debts cannot be more than $394,725. At the same time, your secured debts cannot total more than $1,184,200. Furthermore, you must be current on your income tax filings and must have a regular source of income to make plan payments. You may not pursue a reorganization bankruptcy if you have done so in the past two years. The same is true if you have filed for Chapter 7 protection in the past four years.
The process of filing for Chapter 13 bankruptcy
The first step in most bankruptcy cases is to attend a credit counseling session. A credit counselor may be able to help you create the payment plan that must typically be submitted when you submit your bankruptcy petition. You’ll most likely need to attend another credit counseling session before your case can be discharged. An attorney may help you submit your petition, payment plan and other documents as requested by the court.
What to know about the payment plan
Your first plan payment is due 30 days after you submit a bankruptcy petition. This is true whether the plan has been approved or not. Typically, plans are approved within 45 days of the creditor meeting, and the creditor meeting takes place up to 50 days after filing a petition. Payments are made to creditors over a period of three or five years.
A Chapter 13 proceeding may make it easier to manage your finances and retain assets both now and in the future. An attorney may be able to answer any questions you have about bankruptcy.