If you have questions regarding filing for a Chapter 13 Bankruptcy, contact us for a free consultation to speak regarding if the filing is right for you. As an experienced Chapter 13 Bankruptcy attorney who has filed hundreds of Bankruptcy petitions, we are qualified to help you with your legal needs.
This type of Bankruptcy allows for you to enter into a payment plan of your debts that works for you. As part of the process, you will prepare a plan to pay what is owed to creditors in monthly installements ranging anywhere from 36 to 60 months. You may be able to pay back only a certain percentage of the total debts owed. This applies to unsecured debts like credit card or medical bills. You can pay 10% of these types of debts, for example. The percentage to pay back will depend on income, expenses, assets, and other factors. The payment plan that you will enter into can be a more affordable plan as opposed to one offered by the creditor outside of a bankruptcy. You will also be able to keep your property as part of the filing such as your vehicles and home. The difference between a Chapter 13 and a Chapter 7 Bankruptcy is that a Chapter 7 will allow for a complete discharged of unsecured debts. While a Chapter 13 allows for a payment plan.
Filing Chapter 13 will allow you to keep your property free from creditor control. If you have fallen behind on vehicle or mortgage payments, the creditor will attempt to repossess the vehicle or file foreclosure proceedings for the home. You don't have to let this happen. If a creditor has taken action such as repossession, you can simply file Chapter 13 Bankruptcy to get possession of your vehicle back. You will have to pay what is owed during the monthly plan in the Chapter 13 but you will get your vehicle back. The same principle applies to your home. If a lender has initiated foreclosure proceedings, filing for Chapter 13 will have the foreclosure proceeding dismissed. After a foreclosure proceeding, a sale of the home can be ordered by the judge. In order to prevent the sale, you will be able to file Chapter 13 to save your home. The Bankruptcy can also prevent liens to be placed on your property such as from the IRS or the Department of Revenue for back taxes.
Filing Chapter 13 Bankruptcy will dismiss all pending creditor lawsuits. If a creditor has begun garnishing wages from your paycheck, that will stop as well after filing. Furthermore, creditors will be prevented from attempting to discover banking information and freezing bank accounts. In other words, creditors must stop attempting to enforce a judgment after filing Chapter 13. It will be a violation of federal law for creditors to attempt to collect on the debt after a Chapter 13 filing.
As discussed above, this type of Bankruptcy allows for affordability to pay back debts. The plan takes into consideration the financial obligations of the filer such as monthly expenses and compares it to the income earned. Often times, the amount left over after expenses are paid can be the monthly payment plan. Chapter 13 Bankruptcy can also allow you to make payments in a lesser amount than what the current payments are for your vehicle. This is called a "cram down". If what is owed on the vehicle is more than the actual value of the car, you could reduce your vehicle payments to the value.
A Bankruptcy "Discharge" means successful completion of the Chapter 13 Bankruptcy. This means you have made all payments as proposed. The discharge is that certain remaining debt is now forgiven. The types of debts with remaining balances that will be forgiven after completion of a Chapter 13 are the following:
Other debts will not have remaining balances forgiven. Examples of these types of debts are mortgage payments and vehicle payments.
The Chapter 13 process should not be a headache and can be relative straightforward. Below is a list of what you will need to do during this process:
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