Irishman Walking (Stage 1 Chapter 13)

As soon as you make the decision to file a Chapter 13 bankruptcy in Memphis, contact your attorney. He or she will be able to walk you through the process and make sure that you're doing everything that you can to ensure that your payment plan is accepted and your bankruptcy is discharged as quickly as possible.

A court appointed bankruptcy trustee will act on the behalf of the homeowner to make provisions with the mortgage company. The homeowner is then allowed to make their monthly mortgage payments with an extra amount each month until they have caught up on their delinquent payments.

The Chapter 13 discharge is similar to a Chapter 7 bankruptcy (credit card bankruptcy) discharge in that you can eliminate as much of your debt as the bankruptcy law will allow you to eliminate. But unlike Chapter 7, in which you obtain a discharge (elimination) of your debts in about 90 days, in a Chapter 13 you have to complete a 3-5 year repayment plan before obtaining a discharge.

During your repayment years, you'll also have to complete financial counseling. Additionally, you can't get into further debt, which means you get to start off with a clean slate when all is said and done.

One big reason people choose Chapter 13 is that it will allow them to get caught up on their mortgage. If you've fallen behind in your payments, you can pay the arrears over the course of three to five years. Of course you have to be able to afford to pay the arrears as well as your regular mortgage payment, so if you've fallen too far behind Chapter 13 may not be possible. Chapter 7 will not let you get caught up on mortgage payments.

Chapter 13, on the other hand, will more likely help a homeowner keep his/her home. While Chapter 13 requirements are also stringent, requiring the debtor to make enough money for regular payments and to keep up with payments, it will usually protect a home from being foreclosed on if the consumer works to make every payment. Something homeowners need to be aware of is that if they do not make their scheduled payments, they can still put all of their property in jeopardy of being lost.

When creditors call, you can tell them you've filed for bankruptcy and that any and all communication regarding your debt should be directed to your lawyer. Do not make any payment arrangements or discuss terms. This is no longer an issue between you and your creditor. It is an issue between the bankruptcy court and your creditors.