Can a Chapter 13 Bankruptcy Help with Missed House and Car Payments?

Managing Your Debt When Federal Relief Programs End

The end of hardship programs is looming. Are you behind on your house or car? Will you have income starting in the next month or two? Is your income already back in place but the bills are too high to catch up on everything? If the answer to these questions is “yes,” it may be time to consider a Chapter 13 bankruptcy.  

For Home Owners

In a Chapter 13 bankruptcy, you are paying back a portion of your unsecured debt (0 to 100%) depending on your income and your assets. As part of the Chapter 13 bankruptcy, you could pay back any mortgage arrears accrued up through the day of the filing of the case, even if the mortgage company has initiated foreclosure proceedings against the property. However, the case must be filed before the date of sale (auction). After you file, you resume making your ongoing mortgage payments and the amounts you were behind are added to the amounts you are paying in your case. House saved!

For Car Owners

If you are behind on your car payment and you want to keep the car, a Chapter 13 bankruptcy may be a good way to take care of that.  The entire amount owing on the vehicle would be paid over the 5 years of your bankruptcy case.  Basically, the remainder owing on the loan will get re-amortized for the 5 years of your case.  Often times, interest rates are lowered as well.  Even if the car has been repossessed (bankruptcy must be filed within 10 days of the date of the repossession), we can get the car back and you can pay it through the case. 

Pearson Butler Is Here to Help

There are many other factors that go into deciding what kind of bankruptcy case is right for you. At Pearson Butler, our bankruptcy lawyers have more than 20 years of dedicated experience helping Utah residents seek out and implement debt relief solutions, in addition to decades of experience across all other areas of our law practice. If you need help after COVID-19 programs end, we’re here to help you discuss the options.

 If you want to know more, please call (800) 265-2314 and we can get you set for a free consultation.