Once a St. Louis Chapter 13 bankruptcy is filed, a repayment plan is created in which certain debts are paid back over a period of three to five years. This repayment plan involves monthly payments to be made to the Chapter 13 Trustee. The Trustee’s job is to disperse the monies to the various creditors listed in your repayment plan. Once the plan is completed, you receive a discharge from the court of any remaining unsecured debt (like credit cards, medical bills, payday loans, etc.), and all of your secured debts (like car loans or tax obligations) are declared paid-in-full.
However, the court also recognizes that a great many things can occur over the course of three to five years. Lay-offs, reductions of income, and losses of jobs are common examples. But also unforeseen things like death of a co-debtor or severe injury to your person can happen as well. All of these examples can result in a tremendous amount of change to your circumstances. In fact, it may make your ability to send in regular Chapter 13 payments next to impossible.
In this type of situation, there is a possibility of converting your Chapter 13 to a St. Louis Chapter 7 bankruptcy. The Missouri or Illinois Chapter 7 is an immediate discharge of unsecured debts, and allows you to keep secured assets (like a car or house) by reaffirming those loans (so long as there is not significant equity above your state exemptions). This conversion between chapters is not something that happens automatically and does require a separate motion to be filed with the court. But in certain circumstances, it is the best of all possible options.
The affordable St. Louis bankruptcy attorneys at The Bankruptcy Company have been making sure that our clients’ needs are met at all times for years. Regardless of which chapter of bankruptcy you file, our goal is to get you the fresh start / clean slate you deserve so that you can begin your journey back to financial freedom.
Call us at (314) 932-1067 or contact us through our website The Bankruptcy Company to set up your free consultation with our experienced St. Louis bankruptcy attorneys.