Tulsa Attorney BlogCOVID-19 Forbearance (Part 3): The Benefits of a Bankruptcy Attorney

An Attorney Will Take Care of Your Plan

Video Transcribed: I am Edward Kelley, a bankruptcy attorney in Oklahoma for Wirth Law Office. We’ve been talking about how you can save your home when you run into issues from forbearance ends. COVID forbearances, a lot of people are going through that, through Chapter 13 in Oklahoma.

bankruptcy attorney in OklahomaSo, in this one, I’m going to talk about some of the finer points of that. Just so you understand the terms, chapter seven is a liquidation, that is not a chapter that’s really going to have an effect on whether you keep your home or not.

You’re either current going into chapter seven and keep it, or you’re behind and you can let it go and discharge the debt. A 13 envisions that you’re going to try to keep that, or at least if that’s the reason why you’re filing it.

Again, to recap a little, let’s say you had been in forbearance for 12 months, had a $500 mortgage payment, lo and behold, January 1st, as you come out of forbearance, you owe $6,000 because it wasn’t explained clearly that a forbearance does not set up a payment plan for what was held off. Just when it ends, you owe it all, which is know pretty moronic really. If you had had it all the time, then you would have paid for it.

But that’s what a lot of people are facing. So, as I said in the last video, chapter 13, the power of the federal government forces a freeze on any foreclosures or any collection actions. And you can propose a chapter 13 plan. And that’s what I do as your attorney.

It’s not, of course, needs your input, but that’s why you hire me to do it, which in the case I just described, you’re going to pay that $500 mortgage payment, plus $100 a month for 60 months to make up that $6,000 that you owe. So, $600 a month is paid through the trustee. And this is what I’m talking about. How does that work?

So, you hire me. I get that plan written up with those details. I build in interest and negotiate with the creditor. I make sure nobody’s going to object. And then, the court, meaning the judge, has to approve that plan.

But basically, as long as I’ve got your mortgage company and the trustee, that’s who administers your case, onboard, then we present that plan. The judge okays it. And then, as long as you make those payments, which will go directly, it’s best to do this way, out of your bank account, into the trustee’s office. They will then disperse, pay your mortgage company that $600.

So, that’s the operational aspect. Another great thing about the 13, you’re going to pay right to the trustee. They’re going to take care of the payments. I, as your attorney, am going to take care of the plan. You just give me your accurate income information, and then, we’re good. And at the end of that 60 months, as long as you’ve made all the payments, then you are fine, and you are back on with your mortgage.

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