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Motion to Incur Debt in Chapter 13

A Chapter 13 debt consolidation plan, which is commonly called a wage earners plan, is a type of bankruptcy where the debtor is paying all or part of the unsecured debt over a period of three to five years. Of course, any unsecured debt that is not paid back will be discharged at the end of the plan. A debtor’s secured debt and any priority may also be paid back through the debt consolidation plan.

During a Chapter 13 debt consolidation a debtor is not allowed to incur any new debt without the consent of the bankruptcy trustee and the bankruptcy court; however, there will come a time in most Chapter 13 cases where a debtor will need to incur some type of secured debt. In a Chapter 13 debt consolidation case our Montgomery bankruptcy attorneys and Selma Bankruptcy attorneys may file a Motion to Incur Debt as part of the plan. This motion is made to the bankruptcy court and served upon the bankruptcy trustee. What has generally occurred is that the debtor has the need to purchase something like a reliable automobile or some other type of necessity. This may include things not only such as a car, but also a washing machine, oven, or furniture. When this occurs, we often ask the court to allow the debtor to have approval to spend a lump sum amount that can be used to purchase the necessary item.

If the Court approves the motion, the order may include such wording with an explanation of what debt can be incurred and what the amount of debt cannot exceed without approval from the court. It may also include an amount. for the monthly payment to not exceed because this may affect the payment to the other creditors and the bankruptcy plan. The trustee has a vital interest in knowing and being heard on the amount of debt that is being sought by the debtor. It is of vital importance when filing a Motion to Incur Debt that you follow the trustee’s rules and guidelines. Failure to do so will almost always automatically prevent the debtor from being able to borrow the money. In most cases our Montgomery bankruptcy attorneys and Selma bankruptcy attorneys contact the trustee before filing the motion and discuss the matter with the trustee. In doing so our attorneys have a clear understanding of what the trustee will approve and what the trustee will not approve.

If the Court grants the Motion to Incur Debt, then the wording of the order may be slightly misleading to the debtor who has little experience in the bankruptcy system. On many occasions we have had our clients call and be completely confused by the order; however, we always explain to a client that the wording must conform to the bankruptcy regulations and to the trustee’s rules and guidelines. Also, any further debt that a debtor needs to incur that is more than the original amount that was asked for in the motion to incur debt will require the debtor to file another Motion to Incur Debt. In other words, if you need more money than originally sought then you must go through the process all over. In some cases, if you want to make payments to a new lender outside of the plan and you're not attempting to discharge the debt at the end of the plan, then you do not have to ask the Court or the trustee for permission; however, if you start missing your Chapter 13 payments because of the new additional debt, then the Chapter 13 trustee may object and ask that your case be dismissed.

Our Montgomery bankruptcy attorneys and Selma bankruptcy attorneys are here to help you. All consolations are always free, and we can usually meet with you within 24 hours. We have four convenient offices located in Montgomery, Selma, Greenville, and Troy. You may call or text us at 334-LAWYERS (529-9377) to set an appointment.! You may also reach by using the Contact Form on our website. You may also email us at Remember that doing nothing changes nothing so call us today!

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.

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Brandon was my first choice for an attorney because he is part of the community and you see him at the local store or PTA meetings and he always has time for you and answer your concerns. Ronica Phifer
The Sellers Law Firm represented me in my social security case, and later in my Chapter 7 bankruptcy. I have been very happy with all that you have done for me, and I refer people to you all the time. Thanks for all that you have done for me and my family. Angie Langford
I would like to start out by saying Brandon sellers is more than a lawyer that has helped my family out in numerous occasions but he's also a great friend to our family. Whenever he can't find a resolution for the problem he always recommends somebody that can. I've known him for years grew up together always been really good friends. I like to say in closing I'm really glad I know him I'm glad he's been able to help us when we've needed him. Thanks for everything you've done. Timothy Palmer
The sellers law firm is the best in Alabama they are friendly and very professional from the attorneys to the people in the office. They where very helpful throughout the whole process and even after it was over. So if you are in need for a bankruptcy firm give Brandon sellers a call you won't be disappointed Thank you Again Brian Floyd
I highly recommend Sellers Law Firm, they are fantastic and care about their clients. They walk you through step by step and advise you of your options. Sheila Wright