What Happens If I Fall Behind On My Payments After Filing A Chapter 13 Bankruptcy?
If someone falls behind on their payments to the Chapter 13 trustee, then the trustee will likely file a motion to dismiss the Chapter 13 bankruptcy. When that occurs, there may be some options available. For example, they might be able to find a way to come up with the amount they are behind in order to keep the bankruptcy current, or they might be able to structure a deal with the trustee whereby their monthly payments get increased to help account for the amount they fell behind on. If someone initially set up a three-year plan, they could extend it to a five-year plan. These are options that an individual and their attorney would be able to discuss and negotiate with the trustee.
What Is The Re-Affirmation Agreement As It Relates To Bankruptcy?
A re-affirmation agreement is an agreement to pay an old or existing debt. The best example of a reaffirmation agreement is one that is tied to secured properties. When someone files a bankruptcy and has a car loan or mortgage, they can either reaffirm that debt (meaning that they would sign documents that would make them liable for that debt), surrender the property, or continue to pay the debt. It is my recommendation to continue to pay the debt, because in a reaffirmation agreement, the individual becomes personally and legally responsible for that debt post-bankruptcy.
When someone files for bankruptcy, they eliminate the debt personally but are able to keep the property as long as they continue to pay the debt. The benefit of this is that if at some point they can no longer afford the car, they can walk away from it and not be responsible for the loan balance. If, on the other hand, they sign a reaffirmation agreement, then they are agreeing to be on the hook personally. This means that if they fail to make payments on a car loan six months down the road and the car is consequently repossessed, then they could be pursued for whatever amount was remaining after the car was sold at an auction. Reaffirmation agreements are not recommended, but they can make sense under certain circumstances.
What Are Some Of The Requirements That I Will Need To Meet In Order To Finish My Bankruptcy?
Whether someone files a Chapter 7 bankruptcy or a Chapter 13 bankruptcy, they will be required to undergo a personal financial management course, which is also known as debtor education. The course typically takes 90 minutes, after which they will receive a certificate that will be filed with the court. If the certificate is not filed with the court, then they will not be eligible to receive the discharge. If someone is in a Chapter 13 bankruptcy, then they will be required to complete and file an additional form.
For more information on Falling Behind On Chapter 13 Payments, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (877) 606-1222 today.
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