How Chapter 13 Works in Raleigh, NC
Are you wondering how Chapter 13 works in Raleigh, NC? Don’t worry – we’re going to explain it in a fun, simple way that makes sense! Let’s dive in and see what it’s all about.
What’s Chapter 13 All About?
Before we get into how Chapter 13 works, let’s first understand what it is. Imagine Chapter 13 as a way to organize your debts instead of wiping them all away like Chapter 7 does. It’s like giving your finances a makeover, helping you keep important things like your house and car while you pay off your debts over time. The best part? You get to stay in control while catching up on any missed payments!
How Chapter 13 Works – In Chapter 13, you’ll make a plan to pay back some of your debts over 3 to 5 years. You’ll send part of your income to a bankruptcy trustee (kind of like a helper). The trustee’s job is to take your payments and distribute them to your creditors, which are the people you owe money to. After you’ve completed your payment plan, any remaining unsecured debt – like credit cards or medical bills – can be wiped out or “discharged”!
How Chapter 13 Works – Here’s a cool perk: Chapter 13 stops things like foreclosures and repossessions. That means if you’re behind on your house or car payments, you get the chance to catch up, and the repo man has to take a break!
How Payments in Chapter 13 Work
How Chapter 13 Works – Now, let’s talk about how Chapter 13 works when it comes to making payments. Each month, you’ll send what’s called your “disposable income” to the trustee. Disposable income is the money you have left after covering your necessary living expenses, like food, rent, and utilities. The trustee then uses this money to pay off your debts.
Your payment plan will cover debts like:
- Credit cards
- Medical bills
- Personal loans
- Mortgage or car loan arrears (if you’re behind on payments)
Your payment amount depends on how much you earn, how much you owe, and what types of debt you have. The goal is to make your payments manageable while still paying off as much debt as possible.
What Happens at the End of Chapter 13?
How Chapter 13 Works – Here’s the fun part: after you finish your payment plan (which usually lasts 3 to 5 years), any leftover unsecured debts will be discharged! That means you no longer have to pay them.
However, there are a few important things to keep in mind:
- If you’re behind on child support or alimony, those debts must still be paid.
- If you’ve filed a Chapter 7 bankruptcy within the last 4 years or a Chapter 13 within the last 2 years, you might have to wait before filing again.
But overall, once you’re done with the payment plan, you’ll feel a huge sense of relief, knowing you’ve tackled your debts and can start fresh!
A Fun Chapter 13 Example
| Monthly Payments | Balance | |
| Home Loan (4 months behind) |
$510/month | $65,000 |
| ’07 Ford Van Loan | $345/month | $12,000 |
| ’06 Chevy Car Loan | $220/month | $9,000 |
| Bank Loan | $190/month | $6,800 |
| Visa | $60/month | $4,900 |
| Mastercard | $300/month | $8,700 |
| Finance Company | $120/month | $4,500 |
| Medical Bills | $60/month | $1,700 |
| Department Store | $150/month | $3,600 |
| Total Payments | $1955 / month | |
How Chapter 13 Works – Let’s look at how Chapter 13 works in real life!
Meet Jon and Tammy Jones. They live in Raleigh, NC, with their three kids. Their combined monthly income is about $2,165. Before filing Chapter 13, their monthly bills added up to $1,955, leaving them struggling to keep up with payments.
By filing for Chapter 13, Jon and Tammy created a repayment plan that worked with their budget. Over the next 3 to 5 years, they’ll catch up on what they owe, while still being able to take care of their family’s needs. Chapter 13 helps them stay in control of their finances, so they don’t lose their home or car.
This example shows that how Chapter 13 works is all about giving families a chance to get back on track without the stress of losing important things!
Why Choose Chapter 13?
How Chapter 13 Works – You might be wondering why Chapter 13 could be the best option for you. Let’s explore some of the benefits:
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Keep your stuff – One of the biggest advantages of Chapter 13 is that you get to keep your house, car, and other valuable assets. As long as you follow your payment plan, you won’t lose these important things.
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Stop foreclosures and repossessions – If you’re behind on payments for your home or car, Chapter 13 steps in and stops the foreclosure or repossession process. It gives you a chance to catch up on payments while keeping your home and car safe.
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Pay your debts over time – Instead of being overwhelmed by all your debts at once, Chapter 13 allows you to spread out your payments over 3 to 5 years. This gives you time to manage your finances in a more comfortable way.
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End the stress – Let’s face it, dealing with debts can be really stressful! Chapter 13 gives you a structured plan to follow, so you can stop worrying and start focusing on getting back on your feet.
Is Chapter 13 Right for You?
So, how does Chapter 13 work for you? If you’re struggling with debt and looking for a way to keep your house and car while paying off your debts over time, Chapter 13 might be the right choice! It’s especially helpful if you’ve fallen behind on payments but still want to stay in control of your finances.
Talking to a bankruptcy attorney can help you figure out if Chapter 13 is the best fit for your situation. Every person’s financial situation is different, and an experienced attorney will guide you through the process and explain everything step by step.
How Chapter 13 Works
– Ready to Learn More?
If you’re ready to take control of your finances and want to learn more about how Chapter 13 works in Raleigh, NC, don’t wait! Start exploring your options and see if Chapter 13 can help you get a fresh start. Whether you’re facing foreclosure, dealing with overdue car payments, or simply want to get a handle on your debt, Chapter 13 could be the superhero you need!
| Before Filing Chapter 13: | After Filing Chapter 13: |
| Net Income: $2,165 | Net Income: $2,165 |
| Monthly Payments: $1,955 | Monthly Payments: $820 |
| Living Expenses: $1,345 | Living Expenses: $1,345 |
| Short Each Month: -$1,135 |
Short Each Month: $0.00 |
