If you are considering a Chapter 13, consider in advance the best ways to make your Ventura Chapter 13 plan work. A successful Chapter 13 plan will result in many wonderful benefits and will reshape your financial future. Of course, the best way to start this process is to consult first with an expert bankruptcy attorney in Ventura.
Chapter 13 offers many benefits for people that choose not to file Chapter 7 bankruptcy. It may save your home by preventing a foreclosure and allowing you to pay off back payments on your mortgage. Chapter 13 may even be used to “strip” or eliminate the lien amounts of a second or third trust deed or mortgage on your property.
In a Ventura Chapter 13 case, you will present a “plan” to the court that will use your net monthly income to pay back a portion of your debts over a 3 to 5 year period. Your lawyer will help you develop a plan that accomplishes your goals. Your plan must be approved (confirmed) by the court, but to get the benefit of your Chapter 13 discharge, you must complete your plan by making the required payments over the term of the plan.
Your Chapter 13 plan is like a new contract between you and the creditors that are affected by your plan. If you hold up your end of the contract by making your payments, you will get the full benefit of your bargain—the Chapter 13 discharge. So the terms and provisions of your confirmed plan bind you and and each creditor.
It will be up to you, though, to make your plan succeed. You will have to adjust to living on a fixed budget. You will make regular payments to the Chapter 13 trustee. Most working debtors accomplish this through payroll deductions that are paid over directly to the trustee. Payroll deductions dramatically increase the likelihood that payments will be made on time and help insure the success of the plan.
In addition, your plan will likely allow you to retain your property as long as payments are made on current obligations. This means you will have to make the regular monthly payments on your mortgage going forward in a timely manner if protecting your home from foreclosure is the focus of your plan.
Another issue that you will face is that you will not be allowed to incur new significant debt without consulting with the Chapter 13 trustee. Of course, this is for a good reason. New debts may compromise your ability to make your plan payments and may diminish your chances of success.
If you are unable to keep up your plan payments, the court may dismiss your case or convert it to a Chapter 7 case under the Bankruptcy Code. The court may also dismiss or convert a case if the debtor fails to pay any post-petition domestic support obligations (for example, child support or alimony), or if the debtor fails to make required tax filings during the case.
So Chapter 13 requires some financial discipline, but it also provides many benefits that are impossible to find anywhere else. Talk to the experts at the Bankruptcy Law Center about your financial situation. We offer a free consultation and analysis and we will show you how to take advantage of Chapter 13 and how to make it work for you.