How Chapter 13 Bankruptcy in Hamilton, OH Helps People over Their Heads in Debt

by | Sep 1, 2016 | Lawyers

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Chapter 13 bankruptcy in Hamilton, OH helps people who are facing big debt to arrange payment agreements with various creditors. The plans last for three to five years and allow these individuals to avoid losing everything to banks and credit card companies. The program is intended to give people a new start while empowering them to pay off their obligations at a more affordable pace.

When a person files for chapter 13 bankruptcy in Hamilton OH, most creditors must stop attempting to collect debts and past-due payments. Continuing to do so is prohibited by law. If the individual owes back payments on a vehicle, the company cannot repossess it. If they are being threatened with wage garnishment over a credit card balance, this and any progress toward wage garnishment must be stopped.

Filing for chapter 13 gives the person a chance to calm down, evaluate their financial situation, and work with an organization such as that of R. Dean Snyder, Attorney at Law, to develop a payment plan. After payments to various creditors are decided upon, the person usually makes one payment to a trustee who distributes the money to the creditors.

Payments will include the current obligations in addition to any arrears. Credit card companies are typically willing to devise an arrangement with minimum affordable payments. A vehicle loan will be paid back with the existing payments along with an additional amount each month for arrears. The same is true if a house is in foreclosure. The existing monthly mortgage is combined with the arrears distributed over the length of the chapter 13 program. It’s essential that someone who signs up for this program can make the payments on time. Otherwise, the program will automatically go into default and end.

In some instances, the court may decide that an expense is not a reasonable one for a bankruptcy case. An example would be a luxury sailboat for which the individual is making monthly payments and is in arrears. Since bankruptcy is intended to help citizens experiencing true hardship, the court may refuse to include that type of possession in a payment agreement.

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