Robert G. Drummond
Standing Chapter 13 Trustee
P. O. Box 1829
Great Falls, MT 59403
(406) 453-4663 FAX
About Chapter 13
Once a petition is filed under Chapter 13, the individual submits a repayment Plan to the Court for the Court's approval. The individual makes monthly payments to the Court appointed Trustee under the Chapter 13 Plan. The Plan must meet certain requirements regarding treatment of Creditors and the Debtor's disposable income to be confirmed. The Chapter 13 Plan allows the individuals to repay their outstanding debts in installments over a three to five year period under the Court's supervision. The Chapter 13 Plan is binding on both the Debtors and the Creditors. After completion of the installments under the repayment Plan, an Order is usually entered discharging the remaining debts owed.
The benefits of Chapter 13 are tremendous. In a Chapter 13 Plan, your mortgage company can be forced to accept a repayment plan over a three to five-year period. This is a lot more manageable than trying to come up with a one-time cure payment to catch up on your mortgage. Some mortgage companies will work with you with what they call loss mitigation options. However, there is nothing that is more powerful than a Chapter 13 bankruptcy case to save a home.
The Debtors have a right to dismiss their Chapter 13 bankruptcy case. The bankruptcy case may also be dismissed in the event the individuals fall behind in their payments or are unable to make a payment which is due under their Plan. Some other reasons why a case might get dismissed are:
Many cases are dismissed or converted to Chapter 7 prior to completion of the entire term of the Plan. Chapter 13 bankruptcy requires discipline and the ability to live within a strict budget.
Upon confirmation, the Court may enter an Order requiring that payments may be deducted from the Debtor's wages during the bankruptcy case. If the Debtor has a job with regular income, the Bankruptcy Court will probably order that the Debtor's Plan payments be made automatically by the Debtor's employer and sent to the Court appointed Trustee.
This is not intended to be a comprehensive description of Chapter 13 and specific questions should be directed to an attorney.
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