Consolidating Chapter 13 Debt Consolidation During Quarantine? How a Case May Differ?
The Covid-19 pandemic has brought many changes in the United States and across the globe, and one of the major domestic impacts has been a suspension of home foreclosures for the upcoming few months at least. What this means for those filing Chapter 13 bankruptcy is immense. In previous times, a Chapter 13 bankruptcy often was filed by home owners who were attempting to avoid foreclosure on their home. This can mean for some that they will not lose their home, and they could potentially wait until the economy recovers to the point the suspensions are lifted. However, it may be a good time to actually file because the possibility of a debt restructuring and repayment plan could be more readily acceptable to both creditors and the court system. The best first step is consulting with Loris Law Firm bankruptcy attorneys in Mobile Al to discuss the potential for a successful petition filing.
During traditional times before the pandemic most Chapter 13 repayment plans were only allowed a five-year maximum. There were cases where this was extended, but only when all parties were in complete agreement. The new standard has included setting the five year period back to seven years for those who can qualify based on amount of debt and income resources to comply with the repayment schedule. This could also include exclusion of certain debts when creditors are willing to renegotiate the terms of any outside financial liabilities.
What an Attorney Can Do
This extension of repayment allowances could be an advantage for your attorney when they can discuss each particular account regardless of delinquency in convincing creditors that the new policy will be beneficial to them as well in a restructuring plan. The fewer debts included in a Chapter 13 filing means a much better possibility of completing the repayment schedule with minimal damage to personal credit rating after emergence.
Contact Loris Law Firm bankruptcy attorneys in Mobile Al for more information on the new Chapter 13 policy.