BASICS OF CHAPTER 13

Some clients file Chapter 13 Bankruptcy because they are behind on their house or car payments. Chapter 13 Bankruptcy can stop a mortgage foreclosure and give you three to five years to catch up your past-due payments. Chapter 13 can also allow you time to catch up on late car payments by paying your car note through the plan, often at a lower monthly amount.

What is Chapter 13 Bankruptcy (commonly called Debtors Court )?

Debtors Court or Chapter 13, is that part of the Federal Bankruptcy Code under which a person may repay all or a portion of his or her debts under the supervision of the Bankruptcy Court. Most people who file a Chapter 13 Bankruptcy do not lose their property. Instead, they file so that they can keep their house, car, and furniture.

Many clients file a Chapter 13 Bankruptcy to prevent their mortgage company from foreclosing on their home. Even if a foreclosure has been started, a Chapter 13 Bankruptcy can stop the proceedings. The late payments can then be caught up over a period of years.

If you are behind on your car or truck payments, filing a Chapter 13 Bankruptcy will stop the finance company from repossessing the vehicle. In many cases, the amount of the car payments can be lowered.

If you have credit card debts or loans that have no collateral, you may only have to pay back a small part of what you owe. Under the right circumstances, you can pay off credit cards, medical bills, and other unsecured debts for as little as 1 cent on the dollar.

Also, a tax levy on your wages can be stopped. Garnishments on wages can be stopped. Some leins on real estate can be stopped. Lawsuits can be stopped. Some taxes can be stopped.

Myself or an associate attorney will meet with you without charge to help determine if Chapter 13 would best serve your particular needs.

DO I NEED TO PAY ANY MONEY UP FRONT?

Most clients who have a regular source of income will be able to file a CH 13 debt consolidation petition without paying any attorney’s fee up front. The attorney’s fee is approved by the court and paid out of the monthly plan payments.

CAN I KEEP MY HOUSE AND STOP FORECLOSURE?  

If a client is behind on their house payments they can stop the foreclosure by filing a CH13 case. The client would be able to add their back house payments to the CH 13 case and pay their back house payments over a period of up to 60 months. The client would however continue to make the regular monthly mortgage payment outside the case.

CAN I PREVENT VEHICLE REPOSSESSION WITH CH13?

A person can file a CH13 case and prevent vehicle repossession. When the case is filed the vehicle/s will generally be added to the case and paid for entirely through the case over a period of up to 60 months. Often the amount owed on the vehicle and the interest rate being charged by the creditor can be reduced during the CH13 case by filing a motion to value the car and objection to the  interest rate..

CAN I KEEP MY FURNITURE AND OTHER HOUSEHOLD ITEMS?

Generally most furniture and other  household items are exempt up to $7500 if filing individually and $15000 if filing jointly and therefore would be retained by the client . If an item is secured by a creditor the item can be paid for in the CH13 case or if available a motion can be filed in certain cases to wipe out that creditors secured claim.

CAN LAWSUITS BE STOPPED? 

Filing a CH13 case prevents any lawsuits from being filed or judgments taken against you. When a client files a debt consolidation case and a lawsuit is pending, it can go no further. If a judgment has been taken, its enforcement can go no further unless allowed by the bankruptcy court.

CAN GARNISHMENTS BE STOPPED?

After a CH13 case is filed a motion is filed that immediately stops garnishments from continuing.

CAN TAX DEBTS BE STOPPED?

Income tax debts over three years old will usually be wiped out with other unsecured debt if the tax returns were filed promptly. Other taxes that are not wiped out can be paid in the CH13 case over sixty months, usually without additional penalties or interest charges.

After a Ch13 case is filed, the IRS cannot garnish your wages, seize your bank account, close your business, perfect a tax lien or take any other collection effort.

Please scroll down this page to view the various answers to the frequently asked questions concerning CH 7 Bankruptcy.

CAN I KEEP MY HOUSE?

Generally a client can keep their house when filing CH7 Bankruptcy if they are current on their mortgage payment and they do not have to much equity in the home. The general rule is $15000 for individual and $30000 for a joint case (joint means you and your spouse file together). Please call to discuss how to determining the amount of equity in your home.

CAN I KEEP MY VEHICLES?

If a client is current on their vehicle payment the client will generally be able to keep the vehicle. If the client owns the vehicle free of any debt the client will generally be able to keep the vehicle if it is not valued much over $75000 individual or $15000 joint.

CAN I KEEP MY FURNITURE AND OTHER HOUSEHOLD ITEMS? 

Generally most furniture and other  household items are exempt up to $7500 if filing individually and 15000 if filing jointly, and therefore would be retained by the client . If an item is secured by a creditor the item can be paid for by the client by reafirming the debt or if available a motion can be filed in certain cases to wipe out that creditors secured claim.
( When reafirming a debt, the creditor will send an agreement to our office, the client would sign the agreement, the agreement will generally say they will keep the property and continue to pay the debt under the original agreement.)

CAN I WIPE OUT LAWSUITS AND GARNISHMENTS?   

The filing of a bankruptcy prevents any lawsuits from being filed or judgments entered against you. If you file bankruptcy and a lawsuit against you is pending, it can go no further. If a judgment has been entered, its enforcement can go no further, at least not without first getting permission from the bankruptcy court.

After a CH7 case is filed a motion is filed that immediately stops garnishments from continuing.

CAN I WIPE OUT TAX DEBTS? 

Income tax debts over three years old can usually be wiped out with other unsecured debt if the tax returns were filed promptly only with a ch13.

WHAT DEBTS WILL NOT BE WIPED OUT?

Generally speaking, the following debts will not be discharged: Income Taxes, Spousal and Child Support, Debts arising out of willful misconduct and or malicious misconduct by the debtor, liability for injury or death from driving while intoxicated, nondischargeable debts from a prior bankruptcy, student loans and criminal fines, penalties and forfeitures, checks written for goods or services.