How do I know if I qualify for a Chapter 13?

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How do I know if I qualify for a Chapter 13?

Posted On : Dec-02-2010 | seen (1106) times | Article Word Count : 603 |

Well, the first thing you’re going to ask yourself is are there things that you want to hold onto? Meaning, are you considering keeping your house? Are you behind on your car? And the biggest issue is going to be, how much money do you make?

And so if you have a good reason to be in a 13, that’s the first thing to look at and that’s typically your house. You’ll want to strip off that second like we talked about. Your cars may be more than three years old, so you want to strip them down to value. And you have the income to actually be able to pay a monthly amount.

So with those things in mind, then you take a look at your debt. How much debt do you have? Because that’s another test in Chapter 13. So as of today, the bankruptcy court says you can have approximately a million dollars in secured debt.

So say for example, I have a house and it has a first mortgage on it for $700,000. And the house is also worth close to $700,000. Now I have a second piece of property, and that mortgage is $300,000. And my house is worth close to $300,000. So that’s secured debt of the total of the million. So I would be fine there.

Now the next step is looking at your unsecured debt. And right now the bankruptcy court says you can have up to $336,000 in unsecured debt. So that’s credit card debt, that’s personal loans, that could be a mortgage that you’re stripping off.

So going back to that first house I have. It’s worth $700,000 but I have a second on it, and that’s $100,000. So I could strip that off and that would be part of my $336,000 of unsecured debt.

So those are the two things you look at. You look at what you can afford to pay, and you look at the type of debt you have. And if you make a determination that you think you want to hold onto your home and you’re in a position to be able to repay on your debt, you’re an excellent candidate for a Chapter 13.

And that’s really what you’re most interested in.

Now the question I get a lot is, “What’s the difference between unsecured and secured debt in a Chapter 13?” And that’s pretty simple to figure out.

Secured debt is anything that’s attached to collateral. And I what I mean by that is think about your house being attached to a mortgage or your car being attached to a loan. That’s secured debt.

Unsecured debt is like a credit card where they’ve given you a line of credit and you pay on it every month in order to purchase things.

And so that’s really the distinction.

So when you’re looking at Chapter 13, think about if you’re going to be stripping off things. Those become unsecured debt. And remember your cap on unsecured debt is $336,000. So add up your credit card debt, any type of personal loans, and then look if you’re going to strip off a second mortgage or bring your cars down to value to see what those are going to total.

If that’s the case, then you’re definitely going to qualify for a Chapter 13.

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<h1>How do I know if I qualify for a Chapter 13?</h1> Author: <a href='http://www.articleseen.com/profile_Christy Thompson.aspx'>Christy Thompson</a> Well, the first thing you’re going to ask yourself is are there things that you want to hold onto? Meaning, are you considering keeping your house? Are you behind on your car? And the biggest issue is going to be, how much money do you make?

And so if you have a good reason to be in a 13, that’s the first thing to look at and that’s typically your house.  You’ll want to strip off that second like we talked about.  Your cars may be more than three years old, so you want to strip them down to value.  And you have the income to actually be able to pay a monthly amount.

So with those things in mind, then you take a look at your debt.  How much debt do you have?  Because that’s another test in Chapter 13.  So as of today, the bankruptcy court says you can have approximately a million dollars in secured debt.

So say for example, I have a house and it has a first mortgage on it for $700,000.  And the house is also worth close to $700,000.  Now I have a second piece of property, and that mortgage is $300,000.  And my house is worth close to $300,000.  So that’s secured debt of the total of the million.  So I would be fine there.

Now the next step is looking at your unsecured debt.  And right now the bankruptcy court says you can have up to $336,000 in unsecured debt.  So that’s credit card debt, that’s personal loans, that could be a mortgage that you’re stripping off.

So going back to that first house I have.  It’s worth $700,000 but I have a second on it, and that’s $100,000.  So I could strip that off and that would be part of my $336,000 of unsecured debt.

So those are the two things you look at.  You look at what you can afford to pay, and you look at the type of debt you have.  And if you make a determination that you think you want to hold onto your home and you’re in a position to be able to repay on your debt, you’re an excellent candidate for a Chapter 13.

And that’s really what you’re most interested in.

Now the question I get a lot is, “What’s the difference between unsecured and secured debt in a Chapter 13?”  And that’s pretty simple to figure out.

Secured debt is anything that’s attached to collateral.  And I what I mean by that is think about your house being attached to a mortgage or your car being attached to a loan.  That’s secured debt.

Unsecured debt is like a credit card where they’ve given you a line of credit and you pay on it every month in order to purchase things.

And so that’s really the distinction.

So when you’re looking at Chapter 13, think about if you’re going to be stripping off things.  Those become unsecured debt.  And remember your cap on unsecured debt is $336,000.  So add up your credit card debt, any type of personal loans, and then look if you’re going to strip off a second mortgage or bring your cars down to value to see what those are going to total.

If that’s the case, then you’re definitely going to qualify for a Chapter 13.About the Author: To get additional information on debt settlement and bankruptcy options please visit our web site. We would also like to offer you a free online debt evaluation. You can claim your free online debt evaluation at <a rel="nofollow" href="http://arizonalegaladvocacy.com"> http://arizonalegaladvocacy.com </a>

Christy Thompson your <a rel="nofollow" href="http://arizonalegaladvocacy.com"> Chandler Bankruptcy Lawyer </a>

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Article Source : http://www.articleseen.com/Article_How do I know if I qualify for a Chapter 13?_43707.aspx

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To get additional information on debt settlement and bankruptcy options please visit our web site. We would also like to offer you a free online debt evaluation. You can claim your free online debt evaluation at http://arizonalegaladvocacy.com

Christy Thompson your Chandler Bankruptcy Lawyer

Keywords : chandler bankruptcy lawyer, chandler bankruptcy attorney, mesa bankruptcy lawyer, mesa bankruptcy attorney, gilbert bankruptcy la,

Category : Finance : Debt Consolidation

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