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Chapter 13 Lets You Pay Off Mortgage Debts Over Time

If you have a steady income but are being overwhelmed by creditors, filing for Chapter 13 Bankruptcy is a way to reorganize your debts and repay all or part of them over a longer period of time-usually between 3 and 5 years.

In order to qualify for Chapter 13, you must have enough regular income to cover all your monthly household expenses plus an agreed-upon monthly payment to reduce your debts.

Chapter 13 Bankruptcy May Be Right For You If:

  1. You are facing foreclosure and you want to save your home.
  2. You have too much income to qualify for a Chapter 7 Bankruptcy plan.
  3. You have fallen behind in your mortgage payments.
  4. You have fallen behind in your car payments.
  5. You owe more on your first mortgage than the market value of the home, and you have a second mortgage which you want to eliminate.
  6. You have property that is not exempt from the Rhode Island bankruptcy code.
  7. You have filed for a Chapter 7 Plan within the past eight years and are not eligible to file another Chapter 7.

When you file for a Chapter 13, a payment plan that addresses your specific needs is created. This plan will allow you to reorganize your finances, retain your property, and repay part or all of your debt over a specified period of time which can be anywhere from three to five years. Debts that are determined to be “non-dischargeable” must be paid in full.

Chapter 13 is not a viable option for everyone. In order for a Chapter 13 bankruptcy plan to be approved, you must have enough income to cover all your monthly household expenses plus your Chapter 13 plan payments, which will be determined by your specific financial condition.

Chapter 13 Success Story:

Susan left Jack and moved to Massachusetts. Jack thought Susan had been paying the mortgage from their joint account, but apparently she had been using the money for other purposes and had built up a mortgage debt of $60,000. The bank moved to foreclose on the house and Jack was prepared to let the house go. Attorney Goldman filed for Chapter 13 protection and worked with the bank to reduce his monthly payments, the interest rate and capitalized the arrearage. Jack gets to stay in his home and his debt will be cleared when he sells his home sometime in the future.

Frequently Asked Questions About Rhode Island’s Bankruptcy Laws:

Q: Does filing for Chapter 13 Bankruptcy mean I have to relinquish all my property?

A: No. Under Rhode Island law you may keep all you household goods, including appliances, clothing, dish ware, furniture, books and wedding rings. You may keep your car if you making monthly payments on it.

Q: I’ve heard the term “means test.” What is that?

A: The “means test” determines whether you can afford to pay back at least a portion of your unsecured debt. You pass the test automatically if your income is below your area’s median income.

Q: What if I fail the means test?

A: You still may be eligible for Bankruptcy protection under Chapter 13 in which case you will need to payoff your debt within five years.

Q: Are student loans eligible for Chapter 13?

A: No.

Q: Am I able to get rid of a second mortgage?

A: You might be eligible. Read more information about eliminating your second mortgage.

Got More Questions? For more detailed answers to these and other questions about filing for bankruptcy, contact Janet Goldman for a free initial evaluation. Declaring bankruptcy mayor may not be the right solution for your particular debt problems. The way to find out is to take the time at the very beginning to consult with an experienced attorney. At Janet Goldman Law Offices, we can help you evaluate your specific debt situation and get you on the right track back to normalcy and a life without the constant harassing by creditors.

After Bankruptcy, then what?

More people than you might expect have been through, or are going through the bankruptcy process, and while it can be taxing, there is life afterwards. According to Rhode Island law, certain properties are exempt from repossession if you have filed for Chapter 7 Bankruptcy. These include your household possessions, your jewelry and other personal items, the equity in your home up to $500,000., and your car if you keep up monthly payments.

If you are having trouble with paying your bills and are under stress from nagging collectors and creditors, the sooner you act the better chances you will have in rectifying your situation and returning to a normal life. Contact the Law Offices of Janet Goldman for your first free consultation? Call us at 401-785-2300.

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