Debtor’s Motion to Incur Debt

If you find yourself in the situation where you need to get bankruptcy protections, there are certain rules that you must follow. Some of these rules apply while you are in bankruptcy, especially Chapter 13. The Chapter 13 bankruptcy, often called a reorganization, allows a debtor to repay some or all their debt through payments from three to five years. Issues can occur during those years that might require you going back to the Court for permission to do certain things involving your financial situation. During The Sellers Law Firm’s representation of a client in bankruptcy we will be able to guide you through these issues in-order to allow you to obtain a fresh start through bankruptcy.

The most important part of a Chapter 13 bankruptcy is the reorganization plan. The plan is your proposal to the bankruptcy court and your creditors as to how you offer to take care of your debt. The plan can offer to pay secured creditor for items such as cars and furniture since these debts can often be paid off in the five-year time limit. You may also pay some, all, or none of your unsecured debt such as credit cards, personal loans, and medical bills. However, one of the rules under Chapter 13 is that a debtor cannot enter into to new debt while they are under the bankruptcy protections.

But, realizing that during three to five years emergencies can occur, the rules do allow a process to work around the limitations on obtaining new debt. Emergencies such as the need to have reliable transportation for work that allows you to earn the money to pay for the bankruptcy payment or necessary repairs for housing, or even medical expenses may be obtained when we represent you. Our Montgomery, Selma, and Central Alabama attorneys are just a call, text or email away from beginning the process to help you. Contact us at 334-LAWYERS (529-9377), or use the Contact Form on this website, or email us at bsellers@sellerslawfirm.com. Our phone lines are answered 24 hours a day, and all consultations are always free. Take control of your debts before your debts and creditors take control of you!

So, the process works like this. You have an emergency such as a broken-down car and need several thousand dollars to repair the vehicle so that you can get to work. Contacting us will start the process where we will see if it would be more favorable in your situation to get a different car or borrow the money for the repairs. If the broken-down car is being paid through your plan under Chapter 13 then we will look at issues such as the likely hood that the car will be able to continue to work for you through the life of your plan and if the future repairs may be required. Once a decision is made about repairs vs. replacement then we may speak to the trustee for you about the amount that may be necessary to get you back on the road and get their support for moving forward to borrowing the money. A word about the trustee is that this is the person that collects the payments from you and then pays your creditors. She also can have input with the court about approving any new debt so gaining her approval is very important for being successful in borrowing more money.

We will also need to collect all the information about the proposal to borrow so that it may be presented to the court. If a car replacement is necessary then the judge will need to know how much the new loan will be for, the monthly payment amount, and the interest rate. Also, the court will need to look into your budget to make sure that you would be able to continue making your Chapter 13 payment as well as paying for the new debt. This information will allow the judge to decide if the proposal will allow you to continue in your bankruptcy and obtain a fresh start after completing your bankruptcy plan. After collecting the necessary information, The Sellers Law Firm will file a motion with the Court to allow you to borrow the money. Once permission is granted by the Court then you can get the money that would allow you buy a new vehicle or pay for repairs on your current vehicle. However, the order from the judge must be followed exactly, and they usually include a limit on the amount borrowed and a limit on the monthly payment.

So, while there is a rule against getting more debt while you are in a Chapter 13 bankruptcy the attorneys at The Sellers Law Firm may be able to assist you in handling an emergency where you may need to borrow money while under an active bankruptcy case.

At The Sellers Law Firm, we have locations in Montgomery, Selma, Greenville, and Troy. Our phone lines are answered 24 hours a day, and we can usually meet with you within 24 hours. When you meet with us, we will form an immediate plan of action to help solve your financial issues. All consultations are free! You may reach us by calling or texting us at 334-LAWYERS (529-9377) or by using the Contact Form on our website. You may also email us a bsellers@sellerslawfirm.com. Remember that doing nothing changes nothing so act now! Take control of your debts before your debts and creditors take control of you!

The Sellers Law Firm is designated a debt relief agency by an Act of Congress and the President of the United States. We have proudly assisted people seeking relief under the U.S. Bankruptcy Code for four decades.