Does filing for Bankruptcy allow me to get caught up on past due house payments and car payments?
Under Chapter 13 of the Bankruptcy Code, in addition to temporarily stopping a foreclosure on your home or a repossession of your car, you are allowed to propose a “Plan” that gets you caught up on any past due house or car payments. With respect to your home, the basic concept is to demonstrate to the court that, notwithstanding the fact that you were several months behind on your house payment at the time you filed for Bankruptcy protection, moving forward, you do have the funds available to pay back the past due payments over time. The following hypothetical demonstrates how powerful this concept can be: Assume your house payments are $1000 per month. Assume also that you are 6 months behind because you were laid off from your job or off during a union dispute or a strike. Now you are back to work and can easily make your regular monthly payment of $1000 moving forward. Trouble is, you’re past due $6000 plus late charges of $522! You sit down with your calculator and figure out a mo
