Raleigh Chapter 13 Bankruptcy Attorney Near Me

(984) 7NO-DEBT or (984) 766-3328

How Chapter 13 Bankruptcy Works and How Your Payment Is Calculated

Chapter 13 bankruptcy can sound complicated. It does not have to be.

The basic idea is simple:

You make one monthly payment to the Chapter 13 Trustee. The Trustee then divides that money among the people who need to be paid.

Your attorney fee can also be included in that payment.

If you have any questions or are confused, please call me directly:

(984) 7NO-DEBT
(984) 766-3328

We are happy to explain it.

What Is Chapter 13 Bankruptcy?

Chapter 13 is a type of bankruptcy that lets you reorganize your debts.

Instead of trying to pay many creditors separately, you make a monthly payment under a court-approved plan.

Most Chapter 13 plans last 3 to 5 years, and many last 5 years.

Chapter 13 may help you:

Stop a foreclosure or repossession.
Catch up on missed house or car payments.
Protect property you want to keep.
Stop most collection actions.
Deal with tax debt.
Protect certain co-signers.
Pay only part of some unsecured debts.
Wipe out certain remaining debts when the case is finished.

How Is My Chapter 13 Payment Calculated?

This is one of the biggest questions people have.

There is no single Chapter 13 payment that works for everyone.

Your payment is based on things such as:

Your family’s income.
Your allowed living expenses.
The property you own.
The debts you have.
Debts that must be paid through the plan.
How much your unsecured creditors are legally required to receive.

We gather all this information and prepare a proposed Chapter 13 plan.

The Trustee reviews the plan, and the Bankruptcy Court must approve it.

Once your plan is approved, you make your regular payment according to that plan.

In some cases, your payment can later change if your financial situation or your plan changes.

Where Does My Monthly Payment Go?

Think of the Trustee as the person in the middle.

You send the Trustee your Chapter 13 payment.

The Trustee then divides the money according to your Chapter 13 plan.

The money may go toward:

Trustee fees + attorney fees + car loans + past-due mortgage payments + taxes + other creditors

You do not have to figure out how much to send to each creditor included in the plan. The Trustee handles those payments.

The Three Main Types of Debt

Understanding these three groups makes Chapter 13 much easier to understand.

1. Secured Debt

Secured debt is attached to property.

Examples include:

Car loans.
Mortgages.
Loans secured by other property.

Chapter 13 can sometimes help you catch up on these debts while protecting the property.

Some secured debts may be paid through the Trustee. Others may be paid directly, depending on your case and local rules.

2. Priority Debt

Some debts get special treatment under bankruptcy law and generally must be paid.

Examples can include:

Certain taxes.
Child support and alimony.
Certain bankruptcy costs and approved attorney fees.

3. Non-Priority Unsecured Debt

These are debts that usually do not have property attached to them and do not receive special priority.

Examples include:

Credit cards.
Medical bills.
Personal loans.
Old utility bills.
Certain debts left after a repossession.

Depending on your case, these creditors might receive all of what they are owed, part of it, or sometimes very little.

Some unpaid eligible debt can be discharged when you successfully complete your Chapter 13 case.

How Do Attorney Fees Work?

This part confuses many people, but it is actually pretty simple.

You usually do not have to pay the entire Chapter 13 attorney fee before your bankruptcy is filed.

At Cameron Bankruptcy Law, we generally ask for a smaller amount upfront to help cover the work needed to prepare and file the case.

Most of the remaining approved attorney fee can then be paid through your Chapter 13 plan.

That means you normally do not make one monthly Chapter 13 payment plus a separate large monthly payment to your attorney.

The attorney gets paid from the money being paid into the Chapter 13 plan, according to the court-approved arrangement.

A Simple Example

Suppose your Chapter 13 plan payment is:

$800 per month

You send your regular $800 payment to the Trustee.

The Trustee may divide that $800 among:

Your attorney + car lender + mortgage arrears + taxes + other creditors + Trustee fees

You normally do not send the Trustee $800 and then write another large check to your attorney.

The attorney fee is already accounted for when your Chapter 13 plan is created.

Does the Attorney Fee Automatically Get Added on Top of My Payment?

Not necessarily.

This is an important point.

People sometimes think:

“If my Chapter 13 payment would have been $800, and my lawyer charges thousands of dollars, they are going to add all that attorney fee on top of my $800 payment.”

That is not how you should think about it.

Attorney fees are one of the costs considered when your entire Chapter 13 plan is put together.

In many cases, paying the attorney through the plan can affect how the Trustee divides the money among creditors rather than simply adding the whole attorney fee on top of what you otherwise would have paid.

Exactly how it works depends on your debts, income, property, expenses, and the legal requirements of your case.

Why Choosing the Right Attorney Matters

Chapter 13 is a long relationship.

You could be working with your bankruptcy law firm for 3 to 5 years.

Attorney fees are subject to court rules and approval. Because fees are only one part of the picture, it is also important to look at what you receive for those fees.

Ask questions like:

Is the attorney Board Certified in Consumer Bankruptcy Law?
How much experience does the firm have with Chapter 13?
Will someone answer my questions when I need help?
Does the staff explain things in a way I understand?
Do I feel comfortable working with these people for several years?

Attorney Sheree Cameron is a Board Certified Specialist in Consumer Bankruptcy Law.

What Happens After We File?

Step 1: Take Your Credit Counseling Class

Before filing bankruptcy, you must complete an approved credit counseling course.

You can learn more here:

https://cameronbankruptcylaw.com/online-pre-bankruptcy-class/

There is also a second financial education course that must be completed before you receive your discharge.

https://cameronbankruptcylaw.com/online-post-bankruptcy-class/

Step 2: We File Your Bankruptcy

We prepare your bankruptcy petition and other required paperwork.

This includes information about your:

Debts.
Property.
Income.
Expenses.
Cars.
Real estate.
Financial history.

Once everything is ready, we file the case with the Bankruptcy Court.

Step 3: The Automatic Stay Starts

Filing bankruptcy creates something called the automatic stay.

This is a powerful legal protection that stops most collection actions.

Depending on the situation, it can stop or delay things such as:

Collection calls.
Lawsuits.
Garnishments.
Repossessions.
Foreclosures.

There are exceptions, so tell us right away if you have an emergency.

Step 4: We Prepare Your Chapter 13 Plan

We prepare a proposed plan showing how your debts will be handled.

The plan is based on your income, expenses, debts, property, and bankruptcy law.

Our job is to help create a plan that follows the law while being workable for you.

Step 5: You Make Your First Payment

You do not wait until the judge approves your plan to start making payments.

Your first Chapter 13 payment generally comes due shortly after filing.

It is very important to make every required payment on time.

Step 6: You Attend Your 341 Meeting

You will attend a short meeting called the 341 Meeting of Creditors.

Do not let the name scare you.

The Trustee usually asks simple questions about the information in your bankruptcy papers.

We will be there with you.

Step 7: Your Plan Is Reviewed and Confirmed

The Trustee reviews your proposed Chapter 13 plan.

Changes may be needed.

Creditors may also have the right to object.

The Bankruptcy Court ultimately decides whether your plan meets the legal requirements and can be confirmed.

Step 8: You Keep Making Your Payments

Once everything is in place, you continue making the required payments.

The Trustee distributes the money according to your plan.

It is very important not to ignore a missed payment.

If something happens, such as losing your job or having a major unexpected expense, call us immediately.

There may be options available.

Step 9: You Finish Your Plan

When you successfully complete your Chapter 13 plan and meet the other legal requirements, you can receive your discharge.

Eligible debts that remain may then be wiped out.

You can move forward with a fresh financial start.

Why Would Someone Choose Chapter 13?

Chapter 13 can be very helpful for the right person.

It may make sense if:

You are behind on your house and want to save it.
You are behind on your car and want to keep it.
You make too much money to qualify for Chapter 7.
You own property that could be at risk in Chapter 7.
You owe certain taxes.
You have a co-signer you want to protect.
You need time to catch up on debts.
You want one organized plan instead of dealing with many creditors.

Can Chapter 13 Save My House?

Chapter 13 can be a powerful tool for stopping a foreclosure and giving you time to catch up on missed mortgage payments.

You must still follow the requirements of your Chapter 13 plan and keep up with required payments.

Can Chapter 13 Save My Car?

It may.

Filing Chapter 13 can stop many repossessions through the automatic stay.

Chapter 13 may also allow you to catch up on missed car payments through your plan.

The exact treatment of your car loan depends on your situation.

What If I Miss a Chapter 13 Payment?

Call us immediately.

Do not hide from the problem.

A missed payment does not mean you should give up, but repeated missed payments can put your bankruptcy at risk.

Depending on what happened, there may be ways to modify or fix the plan.

The sooner we know there is a problem, the sooner we can look at your options.

The Most Important Thing to Remember

Chapter 13 does not mean you have to pay every creditor everything they are owed.

It also does not mean you have to come up with thousands of dollars to pay your bankruptcy attorney all at once.

Your Chapter 13 plan brings your financial situation together into one organized legal plan.

You make your required payment to the Trustee. The Trustee distributes that money according to the court-approved plan. Your approved attorney fee can be paid through that same plan.

Every Chapter 13 case is different.

Once we have all the details about your income, expenses, property, and debts, we can explain exactly how your Chapter 13 payment will work.