By Jose Thomas


When the word comes to the mind of most people, what they think about is chapter 7. This is a plan that eliminates your obligation to pay off most debts. However, there is the option of chapter 13 repayments which are ideal for people who for instance are late with car or house payments. The main aim is to save essential assets and to get a discharge. In considering chapter 13 Salt Lake City Utah debtors need to be conversant with what it involves.

All the bankruptcy cases normally are filed at special courts. In order to start chapter 13 cases, one starts by filing documents which list all their debts, income and assets. Altogether these are referred to as schedules, petition and statement of financial affairs. The information provided needs to be complete and accurate to the knowledge of those affected. The information is signed under penalty of perjury.

The repayment plan will last between 3 to 5 years. The maximum they should last is 5 years. As the case begins, the debtor is supposed to come up with their proposition of the repayment plan. There is classification of the debts according to their security, that is, those that are secured and those that are not. Unsecured debts have no collateral. There is then assignment of priority to each debt.

You will note that debts that are for child support or for taxes are more highly prioritized than for instance credit card debts. Monthly payments under chapter 13 are dependent on a number of factors. The factors include amounts one owes in mortgage arrears, their income and reasonable taxes. In many instances, it is not mandatory to pay all that you owe. If your income is adequate to pay back priority debts but it is not enough to repay others, you do not have to repay the ones that are not priority.

When a case is filed, it gets assigned to a judge. A trustee will also be assigned. There is possibility that you can go through the whole procedure without appearing in court. The trustee that is appointed is charged with overseeing the case. Plan payments will be made to the trustee then they ensure the repayment of creditors is done accordingly.

A month after filing of the case, there should be a meeting between the trustee, debtor and attorney for the debtor. This is known as a meeting of creditors. Weirdly, you never find creditors at the meeting. It gives the trustee an opportunity to ask any questions they may have as regards the financial situation of the debtor. The trustee also examines debtor repayment plan to determine its feasibility.

Five years can be a long time and there are many things that can happen. This means there can be upset of payments. The problems that may arise are unemployment, divorce and medical issues. If you are no longer in a position to make payments, you can make changes. This will be done before it gets late.

It will still be possible to obtain credit during the case. Getting a new credit card will need to be through intervention of the court. The credit will have to be for something necessary if it is to be granted.




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