Sample Facts and Figures

Client has a primary house with a first and second mortgage. The value of the house is $120,000.00. The first mortgage is $900.00 a month with property taxes and insurance and $130,000.00 is owed. Client is current on the payments. The second is $500.00 a months and $65,000.00 is owed. Debtor has a car that was purchased 2.5 years ago and owes $20,000.00 and the car is valued in at $12,000.00 and has a payment of $600.00 a month. Client has $25,000.00 in credit card debt minimum payment each month of $625.00.

Before Chapter 13 Bankruptcy the client spends $2,625.00 a month on debts.

Once we file the chapter 13 the client will pay the 1st mortgage directly to the first mortgage company. Since the house is valued at less than what is owed on the first mortgage we can strip the second of the property and that debt becomes unsecured. Since the vehicle was purchased over 2.5 years before filing the chapter 13 we can cram the vehicle down to the value of $12,000.00 and pay it over the next 60 months at 4%-6% interest. After reviewing the client’s net income of $3,000.00 a month and his necessary living expenses of $2,500.00 a month we are able to get him a chapter 13 plan payment of $500.00 a month. This payment will be made to a chapter 13 Trustee who then pays his vehicle and his attorneys fees each month. The unsecured debts which are comprised of the second mortgage, $65,000.00, credit cards, $25,000.00 and the deficiency balance owed to the crammed down vehicle of $$8,000.00, all totaling $$98,000.00 will get the rest. In this case very little or approximately $9,900.00 in total.  The rest of the $98,000.00 is discharged.

Before Chapter 13 Bankruptcy the client spends $2,625.00 a month on debts.

After filing bankruptcy the client spends $900.00 on the first mortgage and $500.00 and his car and other debts = $1,400.00.

This is a reduction of over $1,225.00 a month and an overall saving in over $105,000.00.