You Can Save Your Home in Chapter 13
Video Transcribed: Edward Kelley here, a bankruptcy attorney in Oklahoma. We’re in video four of our five-part series on chapter 13. In this video, I’m going to talk about if you have to do a 13, even though normally you would qualify to do a 7, how does that change things? Well, this will be a short one. Pretty quick answer.
Another reason you might have to do a 13 instead of a 7 is that you did a 7 in the last eight years. You can only get a discharge in a 7 once every eight years, and they go by the date of filing. Maybe you’re five years into it, and you’ve gotten a repo, something terrible has happened, medical emergency, the bill’s not covered, and you’re looking at needing to do a 7, but you can’t for another four years. Well, you can do a 13.
Let’s say you need to save your home or vehicle. Chapter 7 won’t allow you to do that. You can’t force the bank to do anything in chapter 7 other than reaffirm your note or let something go. So, you end up having to do a 13.
Well, the good news for all those people whose income would qualify them to do a 7, but for any other reason, have to do a 13, your plan will be only three years; 36 months versus 60. Same deal. You only pay what you can. That doesn’t change at all. That’s calculated monthly.
If you can only pay $100 a month, then you’re going to pay $3,600 over the life of that plan. You make every payment, everything else is discharged. If you owe 103,600, then you pay 3,600, $100,000 is discharged. That is great news.
Now, if you are trying to save your home or vehicle, you may not be capable of making it up if you have a significant arrearage. If in other words, if you owe for years back that you haven’t paid, you may not have the means to catch that up in 36 months.
You can go as long as 60 months. You may do a five-year plan just because you have to. That’s the benefit still of doing an Oklahoma Chapter 13, even if you could normally qualify for a 7, you get that concession because of your income. You can have a much shorter plan.