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What is Chapter 13 bankruptcy?

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  • Description

    Fox News legal analyst Bob Massi weighs in

  • Duration 3:07
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I last week we told you -- chapter seven bankruptcy in the process of filing if you're having trouble paying off your home loans.

What do you do if you don't qualify for that.

But there are there options then there are Fox's -- Real estate guru Bob Massey is here to explain so -- seven -- roughly define that.

Well seven elect we talked last week is basically when your assets are far below your liabilities you'll only make a certain amount of money.

And you go to the court -- say listen judge I just can't pay these bills and I wanna complete -- -- my liabilities and that's a chapter seven we spoke about last week so let's move to something else and that is chapter thirteen could that be an option.

Yeah it is -- what happens.

-- -- if you have too much disposable income every months let's say you make 5000 dollars a month that your expenses -- 4500 dollars a month.

And -- 500 dollars -- disposable income you may not qualify for the seven.

But you may qualify for the chapter thirteen what happens is if you have a certain amount of -- let's say have 3040000.

And unsecured debt credit card debt or otherwise.

They take that 500 dollars and as a way to plan this out over several years that they backed small percentage.

Of that of that that what I want our -- to understand it's just because you may be out of -- seven.

A thirteen is something you should always look at it will what are we gonna be left with after it after we -- -- chapter thirteen.

-- eventually get up to repay all that.

This this is the good thing if -- about a thirteen so let's see have this debt this unsecured credit card debt.

-- second mortgages Brian that are going after people and they've been turned into the collection.

What you paid.

That certain part that's been approved by the court that's what's important for our viewers understand you actually follow -- plan.

A good bankruptcy lawyer will put this all together for you you follow plan with the court.

The court that will prove that plane that you usually -- -- 36 months or sixty months the pay that back right when that percentage when that percentage of that Brian has been paid back.

After three to five years -- debts discharged.

So it's gone and it's over and so you get the relief differed from a seven.

But you still walk away with paying less.

The what you wrote and that's the beauty of the chapter thirteen and I like the formula you spelled out with that you that you handed us.

He said if you all 40000 dollars -- medical and credit card bills or whatever.

Yet 300 dollars of disposable income.

You work -- a deal that pays 181000 dollars back of -- over sixty months that should be feasible workable.

Absolutely and that's why ultimately what the court will do it sort of like a spreadsheet.

You -- the expenses give the income the court says you have my blessing.

You pay back this over three to five years one quick thing Bryant the only downside to a thirteen it's based on your present income.

If for some reason your income changes and goes down.

Many times yet to go back to court and asked the court for a new blessing to.

To pay different what was approved the -- that's the only downside but that's part of the deal with a chapter thirteen hi Bob thanks so much Bob --

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