The choice to file with a Chapter 13 bankruptcy attorney in San Antonio allows you to begin a journey towards debt relief. Chapter 7 bankruptcy attorneys in San Antonio are able to help you get a completely fresh start, but deciding to go with Chapter 13 lets you continue to repay your debts with lower monthly payments. Although a Chapter 13 bankruptcy remains on your credit report for 10 years, it still demonstrates that you were committed to repaying your debt as opposed to simply erasing it.
How The Payment Plan Works
When you file for Chapter 13 bankruptcy, your San Antonio bankruptcy attorney will assist you in developing a repayment plan. The resulting plan will detail a certain amount that you must pay monthly to a bankruptcy trustee, who will in turn begin to repay your debts. Certain debts must continue to be paid in full, which will affect the amount of your monthly payments. The debts that must be paid at a rate of 100% include:
- Administrative costs: the fees that pay your bankruptcy trustee and lawyer
- Priority debts: obligations that cannot be dismissed, such as taxes, alimony, and child support
- Mortgage expenses: the default on your mortgage that must be paid in order to keep your house
Unsecured debts may be adjusted to ensure that you owe lower monthly payments going forward. Expect to negotiate with your lawyer and the court to determine the amount of your disposable income that must be directed towards your debts. The point of a Chapter 13 payment plan is to institute monthly fees that are manageable, so that when you complete the plan you are ready for the fresh start offered by Chapter 7 bankruptcy.
The Chapter 13 Plan Timeline
In order to allow you a clean slate at some point, there is a cutoff time for Chapter 13 payment plans. At that point, all remaining debts are forgiven and you are free from all monthly payments. The length of your plan is determined by the size of your income. Debtors with income that exceed the median income for households of a similar size are required to continue payments for a period of 5 years in order to more fully repay their debts. However, individuals with an income that is less than the median income must only persist with their monthly payments for 3 years.
Ask your Chapter 13 bankruptcy attorney in San Antonio for assistance in developing a payment plan that will help you erase your debts.