Chapter 13 bankruptcy is a debt repayment plan through which you consolidate your debts and make a payment on your debt over a 3 to 5 year period. If you don't qualify for a Chapter 7 Bankruptcy due to Excessive Income which is determined by taking the "Means Test" you still have the opportunity to get some debt relief through a Chapter 13. While in a Chapter 13 debt repayment plan, the creditors cannot collect from you, and the creditors are required by Federal law to adhere to the terms of the plan. One very important thing to remember about Chapter 13 bankruptcy is that you must be working or have a consistent source of income for your repayment plan to be approved by the court. Not only must you be able to pay for your monthly living expenses, but you must also be able to make a payment to the court to consolidate your debts. Debts that are generally consolidated in a Chapter 13 bankruptcy are mortgage arrears, balances on vehicle loans, student loans, credit card debts and other unsecured debts. All outstanding debts must be listed in the Chapter 13 consolidation even though some may be treated differently. Secured debts are paid 100% on the dollar, while unsecured debts may be paid less than 100% on the dollar.
The Bankruptcy Code was significantly amended with a general effective date of October 17, 2005. It was Congress' intent to make those who could afford to pay back a portion of their debt ineligible to eliminate their debt in a Chapter 7 bankruptcy. This intent is being carried out by the advent of the "means test". To determine if a debtor can afford to pay back a portion of his debts, you must commence a complicated mathematical equation.
One of the documents you have to file with your bankruptcy is a budget, which demonstrates to the court how much income you have each month and how much you need to pay your taxes and living expenses. If your budget shows that you have income greater than your expenses, the court will require that you pay that excess income over to a trustee for a three-, or five-year period in partial payment of the creditors.
The plan under which you make those payments to the trustee is known as a "chapter 13" or "wage earner" plan. The Firm will help you determine whether or not you have excess income based upon the information you provide at your appointment.
Stop Foreclosure Immediately
If your home is presently in foreclosure, a Chapter 13 bankruptcy filing will stop the foreclosure any time prior to the sale, and allow you to repay your mortgage arrears through your Chapter 13. You will still be obligated to make all future mortgage payments directly to the mortgage company, but they may not foreclose to collect any outstanding mortgage payments.
Save Your Car
If the "repo" man is looking for your car, a Chapter 13 bankruptcy will also stop the finance company from repossessing your car. The past due payments and the entire balance on your vehicle loan will be consolidated, which you will pay off over the next three to five years. The vehicle finance company can no longer repossess your car, and you will no longer have to make a payment directly to the finance company. Only one payment is made, and that is to the Chapter 13 trustee.
Consolidate Student Loans
Although you may not eliminate student loans in a Chapter 7 bankruptcy, you can consolidate them, with your other bills, in a Chapter 13 and stop collection action against you. We can stop the collection action and garnishments related to student loan debts and consolidate your bills so that you may repay them in a plan that is feasible for you.
Your cosigners receive the same protection that you receive under Chapter 13 bankruptcy. Through a Chapter 13, we will protect your cosigners from collection activity. So, if you friend or relative cosigned on your vehicle, and you are having trouble affording the payments, we can put your remaining balance inside a Chapter 13.
Why eat up your equity with another mortgage?
You should explore all of your options, and make sure you contact us along the way so we may advise you of your legal rights. When you have quality legal representation, you become knowledgeable about your rights, and become less vulnerable to people trying to take advantage of you in a time of distress. Please remember that we offer a free consultation. Explore Chapter 13 bankruptcy as an alternative to a high-interest rate equity loan against your home.
Stop Creditor Harassment
If creditors are bothering you at work, harassing your family, friends and neighbors, or calling at all hours, you can put an end to it immediately simply by hiring us to represent you. Upon retaining our services, we provide you with a special telephone number so that you can refer your creditors to us. We will keep the creditors off your back, and you can stop paying your creditors immediately.
Eliminate Repossession Debts
After a vehicle finance company repossesses your car they auction it to reduce their loss. You are still responsible for the balance on the car, called a 'deficiency balance'. A Chapter 13 bankruptcy can eliminate your liability for the entire deficiency balance. Remove the risk of lawsuits and garnishments by filing a Chapter 13 bankruptcy.
A Chapter 13 bankruptcy is one of the most effective ways to immediately stop garnishments. Garnishments can diminish your hard-earned income making it nearly impossible for you to afford basic necessities. By filing a Chapter 13 bankruptcy and stopping the garnishment, you will be able to use your income for more important necessities in life and start saving for your family's future.
No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers. This Firm has been designated as a debt relief agency. We proudly assist people in filing for bankruptcy protection.