Chapter 13 bankruptcy is a solution that offers aid to individuals who have regular income, but are nevertheless suffering from heavy debt. A Chapter 13 plan gives you a three to five year window of opportunity to catch up on past-due payments. And even then, some remaining, unsecured debt may be discharged at the end of the plan.
Immediate Relief From Financial Stress
In the majority of Chapter 13 bankruptcy cases (as in most Chapter 7 cases), an automatic stay is enacted as soon as the bankruptcy case is filed. This stay is a court order that immediately stops all creditor calls, law suits, debt collection letters, and wage garnishments, among other things. That’s a lot of stress that can be removed from your life in just a few days of legal work, and definitely far superior to suffering through all of it indefinitely.
Chapter 13 Bankruptcy Basics
Chapter 13 bankruptcy is designed to give people with high levels of secured debt or valuable property the breathing room they need to manage their debts and keep their property.
How Chapter 13 Works
Similar to a Chapter 7 bankruptcy case, your case attorney will prepare numerous petitions and schedules for the bankruptcy court to utilize, detailing your debts, assets, and income. For further insurance, a bankruptcy trustee is appointed to oversee the entirety of your case. After that, your bankruptcy attorney will work together with you to submit a payment plan for the court. With this plan approved, you will be able to disperse past due debts across a three to five year period, while paying current debts as they come. In many cases, you may not have to pay one hundred percent of this debt, as in many cases unsecured debt is discharged at the end of the payment plan.
Once this is all said and done, your trustee and your creditors will have the chance to make objections after reviewing the plan. After approval, you keep your property and make scheduled payments free of from the hungry maws of relentless creditors attempting to con and swindle you out of ridiculous sums of cash.
The Bankruptcy Discharge
For the vast majority of Chapter 13 cases, some unsecured debt is discharged, meaning that you will no longer be legally required to pay that debt. But even if you manage to do away with that debt, it hardly makes your situation any better if creditors continue to hound you over it. In order to prevent that scenario, the court enters an injunction that effectively prohibits creditors and collectors from attempting to collect discharged debt, so you can be free of their heckling for good.
If that isn’t enough to make you feel secure, companies that allow their creditors and debt collectors to violate the injunction are in tur violating a court order. If this occurs, the bankruptcy case can be reopened, and in some cases the creditor will be required to compensate you for their illegal actions.
The idea is not just to get you through your bankruptcy case, but to help provide the opportunity for an actual change in your life. We know as well as you do that such a thing can’t happen if creditors and debt collectors are attempting to bypass the law in their attempts to get more money out of your already tight wallet, so all of our clients are offered a free post-discharge credit report audit. If a creditor or debt collector is trying to ruin your new start on financial stability with inappropriate credit reporting or other illegal actions, we take quick action to rectify the issue and hold the creditor accountable for their crimes.
Eligibility for Chapter 13 Bankruptcy
Passing the means test isn’t required for Chapter 13 bankruptcy. The primary eligibility requirements are simple:
You must have less than $383,175 in unsecured debt and less than $1,149,525 in secured debt; and
You must have regular income from which to make plan payments.
Filing Chapter 13 Bankruptcy
If you decide to enter into a Chapter 13 bankruptcy plan, you’re making a commitment to do three different, very important things. You’ll be committing to a three to five year financial plan with the goal of letting you catch up on past debts, you’ll be committing to protecting your property, and securing a stable foundation for your fiscal future. Since that is all so important for your life, it is absolutely critical that you secure a lawyer who is well educated on all of the ins and outs of a Chapter 13 bankruptcy.
That said, our firm has successfully represented more than 100,000 consumers in a wide array of bankruptcy cases. Our primary goal is to help people build brighter, better fiscal futures for themselves and their families. Our holistic approach includes a great many benefits and services for you and your kin, including but not limited to an assessment of your personal financial situation, consumer financial protection litigation in cases that require it, the proper education to better help you achieve a 720 credit score, and monitoring of your bankruptcy discharge to keep you safe and secure from debt collectors and creditors who would illegally capitalize on your finances.