Chapter 13 Overview
What it is and how it may help you
If you are facing repossession of your car, foreclosure on your home, have a garnishment on your wages, are receiving phone calls at work or home from collection agencies or owe back child support or past due taxes, Chapter 13 may solve your problems. Just as many major airlines have used the bankruptcy law to reschedule their debt, you can use Chapter 13 in certain situations to keep your property, stop lawsuits and end creditor harassment.
Chapter 13 is a method of balancing your income with your government approved cost of living each month and applying the money left to a plan lasting a maximum of 60 months to pay off a portion of the debts that you owe.
Depending on your income and government approved formulas to figure cost of living you can repay as little as 10 cents on the dollar on unsecured debts without interest. On secured debts such as your car, you can pay back the fair market value with interest if you have owned the car long enough and the remaining balance becomes unsecured.
Clear up real estate arrearages and either reduce back taxes or reschedule them over the period of your Chapter 13 Plan.
Delinquent child support and alimony owed to an ex-spouse are also caught up in your plan.
We ask that you bring a list of the bills that you owe and what was purchased.
Review of each debt you owe, the amount you owe and how it is classified is essential. This careful examination allows your attorney to see which bills must be paid as secured and what are unsecured and what are priority debts.
The law permits repayment of different type debts in different amounts. Certain statutory requirements must be met to make sure that you qualify for a Chapter 13 and that you are capable of making the repayment required by law.
Your plan requires you to make payments monthly payments to the Chapter 13 trustee (www.ch13stl.com) who then distributes the funds to your creditors. At the end of your plan, you own your assets and the remaining balances of most of your unsecured debts are discharged.
In emergency situations we can file the necessary paperwork to stop lawsuits and foreclosures immediately.
A person’s home is their castle. Unfortunately lenders are trying to take away that castle. This is accomplished through the lender foreclosing. In Missouri, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process.
Judicial Foreclosure (least common)
Judicial foreclosure involves your home lender filing a lawsuit to obtain a court order to foreclose. This is rare as normally the lender has the “power of sale” built into the loan documents.
This method, is used when no power of sale is present in the mortgage or deed of trust. Generally, after the court declares a foreclosure, your home will be auctioned off to the highest bidder.
Non-Judicial Foreclosure (most common)
The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower pre-authorizes the sale of property to pay off the balance on a loan in the event of the default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".
Power of Sale Foreclosure Guidelines
If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the foreclosure may proceed as follows:
- A notice of sale must be mailed the borrower, at his last known address, at least twenty (20) days prior to the scheduled day of sale. The notice of sale must also be published in a newspaper within the county.
- The sale is conducted by the trustee at public auction for cash to the highest bidder. Anyone may bid, including the lender. If the lender is the winning bidder, the borrower has one year (12 months) to redeem the property.
Most of our clients are aware of this process. We can stop the "REPO MAN" dead in his or her tracks by filing your bankruptcy. The chapter 13 repayment plan we create and submit to the court will have provisions to repay the auto creditor. You get to keep the vehicle and the trustte will pay your creditors.