Chapter 13 bankruptcy (also known as “the wage earner’s plan” or “rehabilitation bankruptcy”) allows you to create a 3 to 5 year repayment plan based on future earnings to pay off all or part of your debts to creditors. Chapter 13 is an ideal form or relief for those is also available to those who do not qualify for Chapter 7 bankruptcy, or who need a chance to catch back on mortgage and vehicle payments. Chapter 13 is also ideal for those who need to pay back the IRS.
Chapter 13 allows you to:
- Stop home foreclosure
- Catch back up on your car or mortgage
- Stop a repossession
- Pay back taxes
- Stop creditor harassment and collection activity
- Keep valuable non-exempt property, such as jewelry, boat, or 2nd home.
Who should consider Chapter 13 bankruptcy?
Your back is to the wall. Creditors are pushing hard. You worry that they might repossess your car. Your home has been posted for foreclosure and the bank simply will not work with you. The IRS is threatening to garnish your wages or put a tax lien on your property, or has already done so. You are behind on child support payments and worry about going to jail. Any one of these situations can cause unneeded stress. It’s time to contact an experienced Plano Chapter 13 Bankruptcy Attorney.
What Chapter 13 bankruptcy can do:
Like Chapter 7, the first thing filing Chapter 13 bankruptcy will do is stop the collection efforts. After you file Chapter 13 bankruptcy, creditors are prohibited from contacting you in any way to collect a debt. They must stop calling you. They must cease any lawsuits. They must stop any repossession and foreclosure efforts.
A Chapter 13 bankruptcy also allows you to set up a repayment plan for debts that cannot be handled in Chapter 7. The repayment plan can give you up to five years to pay back missed mortgage or car payments, back taxes, or delinquent child support. Chapter 13 may also allow you to renegotiate the debt and interest rate on your vehicles and other personal property. For unsecured debt, Chapter 13 can stop interest from accruing and allow you to pay a fraction of the debt, while discharging the rest. Sometimes, an experienced bankruptcy lawyer can assist you in discharging unsecured debt by paying pennies on the dollar.
Who is eligible to file a Chapter 13 bankruptcy?
Almost everyone. Contact an experienced bankruptcy attorney to make sure that you can get all the benefits of Chapter 13.
Considerations in filing a Chapter 13 bankruptcy:
There are a number of things to consider in deciding if a Chapter 13 bankruptcy is best for you. Here are a few:
HOW MUCH WILL THE PAYMENTS BE EACH MONTH?
Chapter 13 involves monthly payments to a bankruptcy trustee, who will make monthly payments to your creditors. If an experienced Bankruptcy Lawyer in Plano knows your income, expenses, assets, and debts, he or she should be able to give you a good idea of how much your monthly payment will be in the Chapter 13 repayment plan. There are generally options that can bring the payment amount down. Make sure there is an option for you that you can afford. Having an attorney with experience in Chapter 13 cases can be a huge help.
SHOULD I FILE CHAPTER 7 INSTEAD?
If you are eligible for a Chapter 7 case, you should consider it. However, even if you are eligible for Chapter 7, Chapter 13 may be a better choice if you are behind on house or car payments, taxes, or child support or in cases in which your assets may be taken in a Chapter 7 case. Chapter 13 allows you to set up a repayment plan to get caught up on those payments and keep the assets that you need to keep. An experienced bankruptcy lawyer can guide you through this difficult decision.
DOES MY ATTORNEY HAVE THE EXPERIENCE AND TRACK RECORD TO SET UP AN PLAN THAT I CAN AFFORD AND THAT WILL BE APPROVED BY THE BANKRUPTCY COURT?
Do not be fooled. Experience counts. Make sure you choose an attorney who has substantial experience in local Chapter 13 bankruptcy cases. Also, look at the attorney’s certifications. Is he or she certified at the state level, national level? Has the attorney ever worked with the Chapter 13 Trustee or Court? Does the attorney take on too many cases, so that he or she cannot give each case the attention it deserves? What percentage of the attorney’s cases receive approval of the repayment plan? In a Chapter 13 bankruptcy case, you may be dealing with your attorney for up to five years. Make sure you select a qualified, experienced bankruptcy lawyer that you can trust.