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Chapter 13/Debt Consolidation

A Chapter 13 bankruptcy is also called debt consolidation.  It enables individuals with regular income to develop a plan to repay all or part of their debt. The purpose of a Chapter 13 plan is to make a monthly payment to a trustee who then pays your secured and unsecured creditors over three to five years.  If the person's current monthly income is less than the applicable state median, the plan will be for three years unless the court approves a longer period "for cause."  If the debtor's current monthly income is greater than the applicable state median, the plan generally must be for five years.  Most Chapter 13 bankruptcy plans do not exceed more than five years. 

Under the protection of the US Bankruptcy code creditors are prohibited to take any collection action against you. 

A Chapter 13 debt consolidation plan offers individuals a number of advantages over a Chapter 7.  Perhaps most significantly, a Chapter 13 offers individuals an opportunity to save their home from foreclosure, vehicle from repossession, stop wages from being garnished, stops assets from being liquidated, may cure deliquent mortgage payments, help with student loans, help with past due taxes, helps with pay day loans and will help with any judgments filed against you.  Another advantage of Chapter 13 debt consolidation is that it allows individuals to reschedule secured debts (other than a mortgage from their primary residence) and stop harassing calls from creditors.

The Chapter 13 bankruptcy also has a special provision that protects co-signers who are also liable for the "consumer debts."

The other reason the Chapter 13 acts like a consolidation loan under which the individuals make the plan payments to a Chapter 13 trustee who then distribute the payments to the creditors.  Individuals will not have any direct contact with the creditors while under the Chapter 13 protection. A Chapter 13 also gives you the opprotunity to rebuild your credit.

Both the Chapter 7 and 13 can give you a fresh finanical start, a peace of mind, reduce stress, give you the opprotunity to get your life back and allow you to sleep better at night.

 For immediate relief and a fresh financial start please call 210-733-9400 today for your free no obligation consultation.