Chapter 13
Debt Relief -
General Information
- Are you:
behind on your car or house payment
with the threat of repossession or foreclosure hanging over your head?
facing a large tax bill because of
interest and penalties which keep adding up?
unable to make the regular monthly
payments on your credit card bills?
If so, then Chapter 13
bankruptcy is a very powerful tool for you. It can be used to stop a
house foreclosure, allowing you to catch up on missed mortgage payments
and keep your house.
You can also use it to
refinance your auto loan. We do this by cramming down your car payments
to pay off only what your car is worth, not what you owe on it. For
example, if you owe $15,000.00 on your car and your monthly payments are
now $355.00, we can reduce your monthly payments to $161.00 if your car
is actually worth only $6,500.00. Additionally, we can also lower the
interest rate on the loan down to 10%.
You can also pay off back
taxes through your Chapter 13 plan and stop interest and penalties from
accruing on your tax debt.
Once we file the case
with the bankruptcy court your creditors are stopped in their tracks.
When you file for Chapter 13 bankruptcy (or any other kind of
bankruptcy), something called the automatic stay goes into effect. It
immediately stops your creditors from trying to collect what you owe
them. Creditors cannot repossess your car, foreclose on your house,
garnish your wages, empty your bank account, or cut off your utility
service or welfare benefits.
Some people use Chapter
13 bankruptcy to buy time. For example, if you are behind on mortgage
payments and about to be foreclosed on, you can file Chapter 13
bankruptcy papers to stop collection efforts, and then attempt to sell
the house before the foreclosure.
Chapter 13 bankruptcy
requires discipline. For the entire length of your case (three to five
years), you will have to live under a strict budget; the bankruptcy
court will not allow you to spend money on anything it deems
nonessential.
The majority of debtors
never complete their Chapter 13 repayment plans. Although most people
file for Chapter 13 bankruptcy assuming they'll complete their plan,
only about 30% of all Chapter 13 debtors do. Many drop out very early in
the process, without ever submitting a feasible repayment plan to the
court. If you can come up with a realistic budget and stick to it,
however, you should have no trouble completing your Chapter 13 plan.
If you want, your
bankruptcy plan payments can be deducted from your wages during your
case. If you have a regular job with regular income, the bankruptcy
court will probably order that the monthly payments under your Chapter
13 plan be automatically deducted from your wages and sent to the
bankruptcy court.
Chapter 13 bankruptcy can
stay in your credit file for up to ten years from the day you file your
papers, although rarely are Chapter 13 bankruptcies reported for more
than seven years. After your case is over, however, you can take steps
to improve your credit. In fact, some Chapter 13 bankruptcy courts have
established programs to help you do just that. In such a program, if you
have paid off around 75% or more of your debts, you may attend money
management seminars and apply for credit from certain local creditors.
Bankruptcy rules vary
from court to court. Bankruptcy law comes from the federal Congress and
is meant to be uniform across the country. But when disputes arise about
the bankruptcy laws, bankruptcy courts make the decisions--and they
don't all decide the issues in the same way. The result is that
bankruptcy law and practice vary significantly from court to court and
from region to region. That’s why it is important to find an attorney
who is very familiar with how the Bankruptcy courts operate in your
particular area. If you live or work in the greater San Diego area and
have questions about Chapter 13 Bankruptcy, why not call The Law Offices
of Mark L. Miller. We will be happy to schedule your FREE no obligation
initial consultation to answer your questions about Bankruptcy. Your
free consultation with an attorney takes only about 60 minutes and isn’t
your financial future worth 1 hour of your time?? |
