A St Louis Chapter 13 Bankruptcy Is Very Useful In Certain Situations

If there is a chapter of the bankruptcy code that most people seem to be afraid of, it is a St Louis Chapter 13. Without a doubt, there are more rumors, horror stories, and falsehoods spread about a Ch13 than anything else in this area of the law. But it just so happens that a Chapter 13 is an extraordinarily useful tool when it comes to some very specific situations. In this article, I will talk about several of these situations (and get to the bottom of why Chapter 13s tend to scare people).

To begin with, a St Louis Chapter 13 bankruptcy is described as a repayment plan over the course of three (3) to five (5) years during which certain debts are paid back. These debts would include things like: back child support, recent tax debts, high interest car loans, missed mortgage payments, and possibly a portion of your unsecured debt (like credit cards and medical bills). So right there in the description is part of the reason why people get freaked out: “repayment plan”. But this should not make anyone fret. Because really what you’re paying off is all the stuff you want to keep (but usually at a much lower rate) and taking care of all the debts that cannot be otherwise discharged (like overdue child or spousal support).

So let’s look at little more closely at a few prime examples as to when a Missouri Chapter 13 would make sense to file. And the most classic place to start would be in regards to a home foreclosure. If you fall behind on your regular monthly mortgage payments, the bank will eventually invoke its remedy for non-payment: foreclosing on the note. The mortgage company (through the law firm that will represent them on the foreclosure) has to send you a certified notification of the foreclosure sale date. This date will be roughly twenty (20) to thirty (30) days later. So long as a Ch13 is filed before the sale actually occurs, then the bankruptcy court will stop the transaction from happening. But if you wait until after the house is sold, then it’s too late for the Chapter 13 to do any good.

Every once and awhile, I’ll have a client come see me who has a foreclosure sale set for the very next day. In this set of circumstances, the court allows us to file an “Emergency Chapter 13”. In other words, the bankruptcy court recognizes that there are some circumstances in which an individual needs to file a bankruptcy petition quickly (so as to stave off some negative event from occurring). The Emergency Filing requires a small number of documents to be signed (and a Pre-Counseling Course certificate provided). A bankruptcy petition is filed at the federal level, and therefore is performed electronically (as opposed to physically taking the documents to the courthouse to be individually file-stamped by the clerk). This will in turn generate a bankruptcy case number. The case number is then provided to the law firm handling the foreclosure, and the sale is stopped.

Another good example of where we would typically file a St Louis Chapter 13 bankruptcy is when your car has been repossessed by the creditor, but you would like to get the car back. Missouri state law provides that if an automobile is repo’ed, the creditor must hold the car for ten (10) days before selling it to someone else. So, if we are able to file a Chapter 13 (which again can be done on an emergency basis if necessary) before the ten days expire, then we can get the car back to you. Or in the alternative, if the ten day period has passed, but the creditor (for whatever reason) has not yet resold the car, then the filing of the Ch13 will prevent the creditor from selling it at that point (and we can still get the car back). Either way, we would want to get your case filed quickly so as to avoid any negative outcome.

And of course, perhaps the most common reason for why someone files a Missouri Chapter 13 bankruptcy is because the court believes that their total household income is too high. For instance, let’s say you are a household of four (you, your spouse, and your two minor children). You make $85K per year, and your spouse makes another $35K per year, for a total of: $120,000 household income. According to the federal government, the average (or median) income for a household of four is: $83,180. If you are significantly above this median (as in the example set forth above), then the Bankruptcy Court will require that you file a Ch13 (because in a Chapter 7, you need to be below the median income level). There are certain situations where we can get you into a Ch7 even though you are above the median. But those are typically situations in which we can take a great deal of exemptions and deductions on your behalf (and not everyone has them).

But if you are in need of a Chapter 13 bankruptcy (for whatever reason), we are more than happy to help you out!! All you need to do is get in touch with us, and we move quickly to get your case filed. The first step in the process would be an initial consultation. And if you have any of the emergent situations described above (like a pending home foreclosure or a recent car repossession), then we will definitely want to get you into our office as soon as possible. At this meeting, we will answer all your questions, fully describe your range of options, provide you with an estimate as to what your Ch13 monthly payment will look like, and get you back on the road towards financial freedom!! We look forward to hearing from you!!

At The Bankruptcy Company, we want to make sure that you receive the very best bankruptcy services in all of the St Louis Missouri area. Our team will get you back on your feet, help to dramatically improve your financial standing, and put you in the best position possible for the future. The attorney fees for a standard St Louis MO Chapter 7 are $675, and the upfront fees for a St Louis MO Chapter 13 are $300. But the initial consultation is free of charge!!