Chapter 13 Bankruptcy Lawyers | Pittsburgh, PA Bankruptcy Solutions
Consumer Bankruptcy with a Repayment Plan
Chapter 13 bankruptcy is available for individuals/consumers and not businesses. (However, individuals that are sole proprietors still may qualify) More often than not, a Chapter 13 filing and plan are used as a “home-saver”. Meaning the payment and retention of a home usually takes a high priority in a Chapter 13 plan. The Chapter 13 repayment plan also allows you to combine your debts (secured and unsecured) and repay all or part of them, while protecting you from creditor harassment and liquidation. Rather than “robbing from Peter to pay Paul” to pay your mortgage, car payments and credit cards each week; Chapter 13 creates one reasonable, monthly payment plan.
One is the biggest keys to Chapter 13 is that unsecured creditors are addressed INTEREST FREE. This means an end to the excessive interest rates on consumer credit cards. This is an excellent alternative for individuals who do not qualify for Chapter 7, as it still provides an option for a debt-free future.
There are a variety of reasons that an individual would choose Chapter 13 over a Chapter 7. More often than not, I see individuals in a Chapter 13 bankruptcy if there is EXCESS INCOME or EXCESS ASSETS. Chapter 7 bankruptcy filings usually evidence an individual’s inability to pay unsecured debts. However, this evidence might not be available, meaning that the individual has SOME monies to pay to unsecured creditors. A Chapter 13 bankruptcy would help an individual that has SOMETHING to pay to creditors, just not enough to meet the excessive contractual obligations of the credit card companies.
A Chapter 13 bankruptcy might also be attractive for an individual that has more property than can be exempted or protected. In other words, a Chapter 13 bankruptcy usually PREVENTS A LIQUIDATION or SALE of your assets. In theory, an individual can agree to pay a certain amount of monies to creditors to AVOID a liquidation of assets. This area of law can be somewhat complex, but can certainly be simplified at your initial consultation.
How Does Chapter 13 Bankruptcy Work?
In general, individuals retain all personal property in Chapter 13 so long as the Court approves the proposed repayment plan. It is important to file the case sooner, rather than later, to protect your valuable assets and lifestyle. The type of plan submitted is based upon a variety of factors, hence it is best to schedule an appointment to discuss further.
Can Chapter 13 STOP foreclosure and keep me in my home?
The electronic filing of the bankruptcy petition triggers the Automatic Stay under §362 of the Bankruptcy Code. The Automatic Stay one of the most important provisions of the Federal Bankruptcy Code. The Automatic Stay immediately stops all foreclosure proceedings.
The Chapter 13 plan allows an individual to repay mortgage arrears over an extended period of time. The mortgage arrears are essentially pro-rated over a 3 to 5 year period at no interest. In theory, a Chapter 13 plan should make a delinquent homeowner 100% current on their mortgage by the end of the plan term.
A savvy Chapter 13 plan can lower car payments; control taxes and eliminate second mortgages and/or credit card debt. Most Chapter 13 plans use these tools in order to “save” the debtor’s residence. It is certainly beneficial to have experienced, aggressive representation at the onset of a Chapter 13 plan to increase your chances of success and Court confirmation/approval.
What Debts Are Not Discharged (Eliminated) in Chapter 13 Bankruptcy?
- Debts incurred through fraud;
- Child and spousal support;
- Debts incurred as a property settlement in a divorce;
- Some taxes including income and real estate. Though they cannot be eliminated, they can be paid and addressed over the plan term;
- Most student loans;
- Debts for personal injury and death caused by your driving a motor vehicle while intoxicated
- Debts for personal injury and property damage incurred through willful or malicious harm;
- Criminal fines and penalties.
What the timeline for a Chapter 13 Bankruptcy?
In general, Chapter 13 plans last 36 to 60 months filing to discharge. At the initial consultation, I am usually able to tell my clients how long a case will last based on my past experience. There are a variety of factors that come into play when determining a plan term. Issues such as payment amount, median income guidelines and disposable income are all factors in Chapter 13 plan length.
How Do I File For A Chapter 13 Bankruptcy?
Filing for bankruptcy can be complex, as there are several rules and procedures involved. Contact Foster Law Offices today for your free, personalized consultation.