Preserving Property Through Chapter 13 Bankruptcy In Colorado
When the economic recession occurred, many people in Colorado lost their jobs or received a reduction in their pay. Even though there has been some improvement reported in a few industries, several homeowners are likely still facing foreclosure and trying to meet their financial obligations. In such cases, filing for Chapter 13 bankruptcy can provide a number of benefits.
Chapter 13 is considered “a wage-earner’s plan.” If a person has a job and wants to pay off debt while keeping his or her home or car, then Chapter 13 may be the best choice.
How Chapter 13 works
When a person uses Chapter 13 bankruptcy, the process allows the filer to restructure debt. However, there are certain requirements in Broomfield that a person must meet in order to be considered eligible for this bankruptcy option.
- The person filing must be employed.
- Unsecured debt cannot exceed $360,475.
- Secured debt cannot exceed $1,081,400.
- Have gone through credit counseling within 180 days of filing.
- The person was involved in another bankruptcy proceeding which was dismissed under certain situations.
- The person agrees to pay off the agreed upon debt within three to five years.
There are some cases in which a person may be able to file for bankruptcy protection under Chapter 13 without meeting all of these requirements, but this is often decided by the bankruptcy court.
What Chapter 13 can provide to Homeowners
One of the main benefits of Chapter 13 bankruptcy is that it can stop foreclosure proceedings that have been initiated on a home. Once a person files for bankruptcy protection under Chapter 13 and a repayment period is granted, then they can use the time period to pay off the overdue mortgage payments, fees and penalty payments, while remaining in their home.
Another benefit of using this bankruptcy option is that in addition to potentially keeping his or her home, the person filing can also keep his or her car. However, the person must agree to pay off what they still owe on the car during the repayment time period. This is often easier for a person to do since unsecured debt can be entirely or partly discharged as part of the bankruptcy proceedings.
Because a person is basically restructuring secured debt through Chapter 13, there is one more benefit provided and this is the use of a trustee. The trustee provides a convenience for the person under bankruptcy protection because it is the trustee who is responsible for paying the individual secured debts each month. All the person has to do is make one payment to the trustee.
If you are facing foreclosure and want to keep your home, then you should talk with an experienced Chapter 13 bankruptcy attorney at Harold Faletti Law office to learn more about how this option can work for you contact us at (303) 438-8477 for a free initial consultation.