Chapter 13 Bankruptcy
Chapter 13 bankruptcy is an option for higher income individuals with the ability to repay some or all creditors. It can be either voluntary or mandatory, depending on household income. A Chapter 13 bankruptcy allows an individual or married couple to file a "reorganization plan" through the Federal Court system. This plan offers a wide range of options and protections that are vastly superior to a normal "debt consolidation". I am an experienced Pittsburgh bankruptcy attorney who can help you file and execute a Chapter 13 bankruptcy reorganization plan.
- Stop Foreclosure and Save Your Home
- Lower Interest Rates on Debt Repayment
- Enjoy Protection from Creditors
- Catch-up on a Car Payments
- Repay Taxes and Avoid IRS Liens and Wage Garnishments
The options available though Chapter 13 bankruptcy are numerous and useful. Perhaps the most important benefit provided by Chapter 13 bankruptcy is the ability to stop a foreclosure and save your home by reorganizing the debt. Arrears on your home can be repaid with no interest, making it possible to catch up on payments missed during unemployment
HOW DO i know if Chapter 13 Bankruptcy is FOR me?
Chapter 13 bankruptcy is completely voluntary. However, based on your household income and family size, it may be the only type of bankruptcy you are eligible to file. As a Pittsburgh bankruptcy attorney, I am familiar with the local standards, requirements, and rules. I will help explain and perform the Federal "means test" which is one of the main factors determining if you must file a Chapter 13 bankruptcy.
Other factors play a role in determining if Chapter 13 bankruptcy is your best (or only) option. The Court will look to see if you have the ability to pay, or if you have excessive assets that cannot be exempted. You may have to file a Chapter 13 if you filed a Chapter 7 bankruptcy too recently.
Chapter 13 bankruptcy is the only option for saving a home or car that has unpaid arrears. But, if you have the income to do it, a Chapter 13 reorganization is an ideal way to get your payments current on your home if you fell behind during unemployment or under-employment.
Contact us to speak to an experienced Pittsburgh bankruptcy attorney who can help you decide if Chapter 13 bankruptcy is for you.
How does a chapter 13 bankruptcy actually work?
Individuals and married couples filing Chapter 13 bankruptcy will have a monthly payment that is automatically forwarded to the United State Trustee's office. The United State Trustee is a Federally empowered office with the responsibility of dispersing bankruptcy funds.
You will not make direct payments to many of your creditors during the reorganization plan; the Trustee will make the payments. This includes mortgages, car payments, payments to your credit cards, taxes, and other creditors. You will continue to pay utilities, normal household expenses, and other ongoing payments. As an experienced bankruptcy, I will explain what is (and isn't) covered by the reorganization plan.
Your payment may seem extremely high, but remember you won't be paying your mortgage, car payments, credit cards, and many other debts.
Will I need to repay every one of my creditors in full?
In many cases, "no". Once again, it will depend on your ability to repay as determined by Federal standards of income and household size. If you want to keep "secured" property, such as your home or your car, you will need to pay those monthly obligations in full. However, the amount repaid to "unsecured" creditors such as credit cards and medical bills varies greatly, literally anywhere from 0% to 100%! Some "priority" debts such as taxes must be paid in full; others such as child support will not be included in the bankruptcy and will need to be kept current during the duration of the case.
As an experienced bankruptcy attorney, I will make sure you will pay your creditors no more than what is necessary under the law. While this may seem complicated at first look, I can explain and simplify it in a way so that you know exactly how much is paid every month, and to which creditor.
How long will the Chapter 13 bankruptcy last?
The reorganization plan will typically be not shorter than 36 months, and will never extend beyond 60 months.
This is another reason to choose your bankruptcy attorney wisely. A good bankruptcy attorney will be by your side for the long haul. Contact us and see why our superior customer service makes us the right choice for this commitment.
Why not File a debt consolidation?
A debt consolidation provides none of the protections of Chapter 13 bankruptcy, and usually costs more! Debt consolidation companies are often fly-by-night operations who pay themselves first (before your creditors) and then disappear when those same creditors sue you for non-payment. I've seen it happen too many times.
Chapter 13 bankruptcy exists under the watchful eye of the the Federal Court system. The Trustees and all bankruptcy attorneys are accountable to Federal judges and auditors. Unlike debt consolidation companies, the U.S. Trustee and experienced attorneys such as myself are not going anywhere.
The automatic stay prevents creditors from taking any actions against you for the duration of the case. Creditors can't even contact you. Once the final payment is made, you receive a discharge that prevents future attempts to collect against you.
Finally, Chapter 13 bankruptcy can account for far more types of debt than the typical debt consolidation, including taxes, student loans, and mortgages.