Consumer Reorganization Plan
- Wage Earner Repayment Plan
- You Can Stop a Foreclosure or Repossession
- Protect a Person that Co-Signed for You
Chapter 13 is a consumer debt reorganization involving repayment of at least a portion of your debts. This type of bankruptcy is for people who don’t qualify for relief under Chapter 7. Others may file Chapter 13 because they need to stop a foreclosure on their home or because they have particular debts that must be repaid, such as most taxes. Chapter 13 can also be a good alternative for someone that owns assets that are not exempt from seizure and sale under bankruptcy law.
While many people think of Chapter 7 and the loss of personal property when they think of bankruptcy, Chapter 13 can be a great option that allows you to keep your property and make payments over time rather than liquidating all nonexempt assets. An experienced bankruptcy attorney can help you determine the best option to best meet your personal and financial needs.
Under Chapter 13 a debt repayment plan is set up through the bankruptcy court. The repayment plan may last from a minimum of 36 months to a maximum of 60 months. In basic terms, this involves calculating how much money you can afford to pay to your creditors and then making payments to the Chapter 13 Trustee’s office for the life of your plan. The actual amount of your plan payment and the length of your re-payment plan will be calculated by our office after discussions with you.
During the plan years, the debtor may catch-up on past-due payments without voiding the contracts they entered into with creditors.This benefit of Chapter 13 is frequently used by petitioners to save their homes from foreclosure. In addition, creditors generally may not initiate or continue lawsuits, wage garnishments, or even make telephone calls demanding payments while the plan is in place.
If the debtor fails to make the payments due under the plan, the court may dismiss the case or convert it to a Chapter 7 case and liquidate the debtor’s property. Failing to follow through with the plan, unless a change is approved by the court, limits the debtor’s ability to file for bankruptcy protection in the future, and of course, removes the protections the failed plan had provided.
At the end of the plan period, Chapter 13 debtors are eligible to discharge much of their remaining debt. However, to the extent that they are not fully paid under the Chapter 13 plan, the debtor will still be responsible for the following:
- certain long term obligations like mortgages;
- debts for alimony or child support;
- certain taxes;
- most student loans.
The Bankruptcy Court ultimately decides what is deemed to be a reasonable attorney fee for Chapter 13 cases. A fee of $3,500 is not unusual in a Chapter 13 case. The good news is you do not have to pay all of this upfront; much of it can be built into your repayment plan. We can file your petition with as little as $1,000.00 down and build the remainder into your plan (including the filing fee and costs).
Mr. Siegrist will provide you with a complimentary consultation to help you decide whether bankruptcy is the best solution for you. This consultation may be either in the office or over the telephone. We will discuss your general questions and give you a broad overview of whether bankruptcy may be the right alternative for you.