There are many benefits to filing a St. Louis Chapter 13 bankruptcy. To begin with, the Missouri Chapter 13 is described as a repayment plan over the course of three to five years in length. It is an opportunity to consolidate your debts, keep the property that you wish to hold onto, and get rid of those creditors that you want to get rid of. All of this is done with one monthly payment that is made to the Chapter 13 Trustee each month, whose job it is to distribute the funds to the various creditors.
The primary reason why a Chapter 13 is filed is because a piece of real estate is facing foreclosure. The bankruptcy petition stops the foreclosure, and gives you a chance to get into a repayment plan to get the arrearage paid off. Stretching this kind of debt over a period of years (a debt that can, depending on how many months the mortgage is delinquent) is much easier than coming up with a lump sum payment made all at once.
Another major benefit of a Chapter 13 is the opportunity to ‘cram down’ the value of an asset to its fair market value. For instance, if you have a car that was purchased more than 910 days ago (or about two and a half years), then instead of paying back the balance of the existing loan in the bankruptcy, you would only have to pay back whatever the current market value (which could be substantially less). So for example, if you have a car that you bought in 2007 with a loan balance of $9,000; but the fair market value of the vehicle is only $4,000 (Blue Book value), then you would only be required to pay back four thousand (instead of nine thousand).
In addition, if the situation requires that a certain amount of unsecured debt must be paid back (i.e. credit cards, medical bills, etc.) in the Chapter 13 plan, then the court does not allow the creditor to continue to apply any interest on the debt. More often than not, people are paying outrageous rates of interest on their unsecured debts (which in turn creates a situation in which you are paying more each month in interest than towards the principal). So if you are required to pay back $2,000 of the $30,000 that you owe to your creditors, then it is exactly $2,000, and no interest attached.
The St. Louis bankruptcy lawyers at Brinkman & Alter, LLC have been making sure that people are put into the best possible situation for their particular needs for years. Our staff is prepared to help guide you through the bankruptcy process, and get you the fresh start / clean slate you deserve.