By: Darrell Castle
Qualifying for the powerful Chapter 13 bankruptcy
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If you need Chapter 13 bankruptcy protection, what do you need to do to qualify? How can you qualify?
Hi, I’m Darrell Castle and I’m an attorney licensed to practice law in the state of Tennessee and I get that question quite often. And I usually answer it by asking a question, and that question is, “If you were current on your mortgage, would you be able to make the payments?”
Because if the reason you need Chapter 13 protection is because you’re behind on your mortgage payment, then you’ve got to be able to make the ongoing mortgage payment in order to do a Chapter 13 to keep your house, which is what you want to do.
So, you make your ongoing mortgage payment and all of the past-due amount can be placed in an affordable plan instead of having to pay it all at once. That’s kind of the way it works.
Now, the other thing Chapter 13 can do in this situation is it can greatly increase your cash flow.
Take for example – if your income was $3,000/month and your expenses was say, $3,500. So, in effect, you’re $500 short every month. In other words, to pay your bills and debts costs $3,500/month and your income is only $3,000.
Well, Chapter 13 allows you to consolidate all of those bills into an amount you can afford where everybody gets paid and everybody is happy. You can meet your expenses. You can pay your house payment. You can pay your car payment. You can keep your property and still meet all your expenses. That’s how it works.
So, it’s a very powerful weapon for increasing cash flow, for retention of assets and for controlling creditors – keeping creditors away from your assets.
So, if you’re interested in any of those things, Chapter 13 just might be your answer.