Chapter 13 bankruptcy gives income earners who have fallen behind on bill payments the ability to pause collection efforts and create a manageable framework to deal with their debt. At the Law Office of Weiss, Schmidgall and Hires, P.C. in Merrillville, Indiana, we help clients determine if Chapter 13 bankruptcy is the best solution to their financial difficulties. If you choose that path, we will prepare a comprehensive filing and answer all of your questions.
Chapter 13 is a consumer bankruptcy option that does not require debtors to liquidate their assets in order to partially repay creditors. Instead, the petitioner enters into a repayment plan that sets a schedule to satisfy one’s obligations over a three-to-five-year period. You can keep your property, including your home and car, while making a monthly payment to the bankruptcy trustee. Your payment might even be less than the total amount you are paying right now for all of your bills. As long as you are faithful to your repayment plan, the bankruptcy court will discharge any remaining eligible debt once you complete the plan. This means you can shed unsecured debt, such as credit card balances and medical bills. However, you are still obligated to continue paying your secured loans, such as your mortgage and car loan, as well as debts that cannot be discharged, including most back taxes and unpaid child support.
In a Chapter 13 repayment plan, you are required to pay back secured debts (such as your home mortgage) in full. However, for unsecured debts such as credit card balances, some personal loans and medical bills, you only pay back what you can afford during your repayment plan period, which in many cases will be less than 100 percent of what you owe. In fact, many Chapter 13 bankruptcy filers are only required to repay a fraction of their unsecured debts. The repayment schedules last from three to five years.
Filing for Chapter 13 bankruptcy also allows you to modify a car loan. In some cases, our lawyers are able to prevent the lender of a second mortgage from maintaining an interest in the home of someone whose first mortgage is worth more than the property’s sale price. This is sometimes referred to as “stripping a lien.” If your driver’s license has been suspended following an accident where you were either uninsured or underinsured, bankruptcy might get you back on the road, particularly when an insurance company has successfully filed a claim against you for funds it paid to an accident victim. Our attorneys can evaluate your unique situation and discuss how seeking Chapter 13 relief might benefit you and your family.
Many homeowners choose Chapter 13 to avoid home foreclosure. Chapter 13 allows you to continue to live in your home and pay down your mortgage based on your monthly income. Then, once your eligible debt is discharged, you can more easily afford to continue mortgage payments. If you have a second mortgage, and you owe more than your house is currently worth, Chapter 13 treats that second mortgage as an unsecured loan, so the court could actually discharge that second mortgage when your repayment plan is completed. Consumers also choose Chapter 13 to protect a valuable vehicle from repossession.
Most people file Chapter 13 bankruptcy because their earnings are too high to qualify for Chapter 7 bankruptcy, they have assets they would lose under Chapter 7 bankruptcy or they have filed for Chapter 7 bankruptcy in the past eight years.
Chapter 13 bankruptcies put an immediate stop to creditor actions such as home foreclosure, repossessions, garnishments, creditor lawsuits and harassment. A bankruptcy lawyer at our firm can explain the full advantages of Chapter 13 protection and other debt relief strategies.
The Law Office of Weiss, Schmidgall and Hires, P.C., attorneys are available to discuss filing a Chapter 13 bankruptcy petition. We offer flexible payment plans and can begin working on your bankruptcy case for as little as $100 down. Day, evening and Saturday appointments are available. Call us today at 219-293-8988 or contact us online to schedule a consultation.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.